Over the past two years, Google's DoubleClick ad exchange -- home to YouTube's
inventory, among other publishers -- has seen a 200% jump in
inventory made available programmatically by publishers and
triple-digit revenue growth for programmatic-video ads. DoubleClick
Product Management Director Rany Ng said auto and retail
advertisers have quadrupled spending on programmatic video in the
Forrester projects advertisers this year will spend $686 million
buying video ads through real-time auctions, a 71% rise from last
year that will reach $1.1 billion next year. However, that's still
a sliver of advertisers' video budgets. The firm estimated that
video-ad spending will hit $3.6 billion this year and $4.6 billion
That advertising's premier auctioneer Google takes bids for YouTube
ads in real time is as unsurprising as sales-heavy Turner keeping
its video content away from automated exchanges. But even TV's
closest digital proxy, Hulu, has dipped its toes into
the programmatic pool. "We've been beta testing an ad exchange in
the past year," said a Hulu spokesperson.
Rather than seeding its supply within free-for-all open
marketplaces, Hulu's exchange is a walled garden. It is limited to
Hulu inventory, like the pre-rolls that stream before an episode,
and only a select number of ad-tech partners can bid on those slots
in real time for their clients. To avoid cannibalizing direct
sales, Hulu is pricing ads sold through the exchange higher than
those sold by its sales team, according to people close to the
situation. Hulu declined to comment.
Alternatively, premium-video publishers are looking to automate
their direct-sold deals. For its digital-video content, NBC is
considering this "programmatic direct" compromise in which its
ad-sales staff would negotiate custom packages with advertisers,
then plug those orders into an automated process, according to
people familiar with its practices. An NBC spokesperson declined to
Advertisers would prefer programmatic direct deals to
publishers' private exchanges because the former can guarantee how
many ads a buyer would receive, said Scott Ferber, CEO of video-ad
These direct deals have become automated video ad-buying company
TubeMogul's fastest growing source of
inventory, rising from near-nothing to 1.4 million ads a day in the
span of a few months. Still that's not nearly as many as the
roughly 44 million ads bought in real-time auctions through
TubeMogul each day.
"Programmatic direct or private marketplaces, they have
definitely crossed the chasm. We're seeing it in the most-premium
publishers that embrace programmatic, from The New York Times to
Viacom to Discovery," TubeMogul CEO Brett Wilson said.
When will programmatic overtake TV? Satellite carriers DirecTV
and Dish Network
already automate the sale of some TV spots, but Magna Global North America President
Kristi Argyilan said the TV slots available programmatically are
leftovers not sold as part of TV networks' annual upfronts.
Meanwhile online video publishers like AOL have begun selling their
content in the same marketplaces as that excess TV inventory, said
Cordie DePascale, VP-product at ad-software company MediaOcean.
The ultimate sign that programmatic has overtaken traditional
buying would be the automation of TV's annual upfronts, which Ms.
Argyilan said isn't too far on the horizon. How far? "A couple