How The OTT Industry Can Benefit From Programmatic Advertising?

Is your ad reaching your target audience?

Do you feel it’s time-consuming having to negotiate with many advertisers?

Do you feel frustrated having to fill up the spaces in your ad inventory?

If you are a publisher or an advertiser, there is always one need in mind. For a publisher, having to fill up the ad space, and for the advertiser, having to sell ads to the right audience.

Wouldn’t it be great if this process takes place with more ease?

The emergence of Programmatic advertising has made it possible. The OTT space has revolutionized the way content is being viewed online. Advertisers and Publishers are aware that OTT platforms are the best medium for targeted advertising and hence, more ad revenue. In fact, the blend of OTT with programmatic advertising can contribute to doubling ad revenues. This blog will help you understand how and why.

What is Programmatic Advertising?

Programmatic Advertising automates ad buying and selling in the digital space.

Let’s understand this better with an example:

Earlier, to run ads and fill up ad spaces, publishers would get in touch with advertisers, and after tiresome bargains, negotiations would come up with a deal. The whole process used to be time-consuming and uncertain.

Here is the role of Ad Networks came. Ad networks would buy your ad space in bulk and then sell them to many advertisers. While display ads increased, tracking the ad performance was challenging. An undefined target audience and the inability of advertisements to cater to the potential customers resulted in a huge loss of ad budget derailed advertising campaigns and meager ad revenue.

To eradicate this issue, programmatic advertising transpired. Programmatic advertising also known as real-time bidding (RTB) ensured two things happened. Ads reached a targeted audience and ad performance properly tracked. 

How Programmatic Advertising Works?

Step 1: Say that you wish to advertise your product or service. You will head to the Ad Exchange, a place where advertisers and sellers meet. The need to launch an ad campaign will determine the ad exchange to use DSP (Demand-side platform). A software used to automate ad buying and selling.

Step 2: The DSP gives advertisers the opportunities to engage with various publishers. The DSP will make use of another software called DMP (Data management platform). This platform holds all the data of an audience such as age, location, and more.  The advertiser will have a set customer profile when launching the campaign.

Step 3: If the ideal user visits the publisher’s website the SSP ( Supply-side platform) will get an ad request. SSPs are being used by publishers to sell ads and leverage value from ad impressions. The auction begins with SSP and DSP engaged.

Step 4: The ad exchange will analyze the ad’s requirements and start the bidding. The one with the highest bid has the ad displayed on the publisher’s website. While this may seem arduous, this auction completes within 100 milliseconds.

Benefits Of Programmatic Advertising

1. Reaches Targeted Audience

With the launch of your ad campaigns, you have the ability to set your target audience. When the ideal audience appears on the publisher’s website, the ideal ad is being viewed by the right user.

2. Avoids Long Negotiations

Programmatic advertising makes use of a machine to determine the right ad for the ideal user. Hence there is no time wasted to search for advertisers and spend long hours negotiating.

3. Displays Relevant Ads

With the bidding taking place, the ad with the highest bid amount is showcased. This encourages the increase of relevant ads hence better ad performance.

4. Improves CTR

With customized, targeted advertising, the probability of viewers watching a complete ad increases, thereby improving the CTR rates.

Benefits of Programmatic Advertising in the OTT Industry

The rise in the OTT players and Pay TV’s lack of customizability has made the former a lucrative business proposition for marketers. The advertisers have started to sense the power of OTT advertising and its hidden potential.

Plus, the advent of AI-based recommendation engines has further widened the scope of OTT advertising with custom ad recommendations basing on user attributes and preferences. The result is simple – more engagement and ad revenue.

Wrapping Up

Programmatic Advertising and OTT are the future. With the growth in the OTT market and trends emerging, you need to adopt resort to new and unconventional mediums to market your offerings. 

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