What is Programmatic Video Advertising? Everything You Need to Know

Blog 1 min read | Aug 29, 2023 | JW Player


Have you ever wondered how those ads magically appear on your screen just when you were thinking about taking a vacation somewhere tropical? It’s not magic, it’s programmatic video advertising!

In this article we give you the lowdown on this digital advertising wonder by peeling back its layers. We will untangle the mysteries of bids, algorithms and target audiences to show you how brands always reach the right users at the right time.

Understanding Programmatic Video Advertising

Programmatic video advertising is a sophisticated method of buying and selling digital ad inventory, particularly video content, using automated technology and algorithms. It transforms the traditional ad-buying process by using data insights to match advertisers with their intended audiences seamlessly and efficiently.

In simple terms, imagine this: it’s like online shopping for ads, but instead of looking for the perfect pair of shoes, advertisers are grabbing the best spots for their video content – a process that is done with some seriously smart automation and algorithms.

At its core, programmatic video advertising relies on real-time bidding (RTB), a process where advertisers bid for available ad space instantaneously, making use of advanced algorithms and data-driven insights. These rapid-fire bids occur within milliseconds, allowing advertisers to display their video content to their precisely defined audience segments across a diverse number of platforms.

The secret ingredient here is APIs—fancy tech connectors that let different platforms talk to each other so that advertisers can optimize their campaigns to perfection across many different channels. You can think about it as mixing and matching ingredients for the tastiest ad recipe. Advertisers can add all sorts of data, like what people are into, what they browse about, what queries they have used and where they’re hanging out online, as well as audience demographics, to supercharge their ad game.

One of the reasons why programmatic video advertising has gone from good to great is because of a little something called retargeting. When you’re scrolling online and suddenly those pants you almost clicked ‘buy’ on last week pop up again? Well, that’s retargeting at work.

Retargeting is all about reaching out to users who’ve already checked out your stuff. Maybe they visited your website, watched a video, or came close to clicking ‘buy’. This method uses complex algorithms to re-engage users across various customer touchpoints. Leading retargeting advertising platforms like MediaMath, SmartyAds, and AdRoll have capitalized on this method, using dynamic templates to craft contextually relevant ads that resonate with the target audience.

To get deeper insights into consumer behavior, preferences and trends, has never been easier now that advertisers can make use of the vast world of third-party data as well. This information can be further used to make targeting strategies even more effective. The third-party data makes the programmatic campaigns even more efficient and precise by making sure that each ad impression is strategically placed to resonate with the intended audience.

Now let’s have a look at the programmatic process and how it actually works from top to bottom.

The Programmatic Process: How It Works

The programmatic video advertising ecosystem involves several key players and processes working together to deliver targeted and engaging video ads to the right audience:

Advertisers: Companies looking to promote their products or services create and manage campaigns using Demand-Side Platforms (DSPs). DSPs allow advertisers to define their target audience, set budgets and optimize their video campaigns. The integration of programmatic technology simplifies the media buying process, allowing advertisers to distribute resources more strategically.

Publishers: Publishers provide the digital spaces where video ads can be displayed. These spaces can range from websites to mobile apps, connected TV and even social media platforms.

Ad Exchanges and Supply-Side Platforms (SSPs): Ad exchanges are a marketplace with real-time auctions where advertisers bid for available ad space for their ad campaigns. SSPs allow publishers to manage and optimize their ad inventory, making it accessible to potential advertisers. The relationship between ad exchanges and SSPs creates a dynamic marketplace where advertisers can compete for ad placements, making sure the most relevant and valuable ads are displayed to their users.

Real-Time Bidding (RTB): Every time you open a web page, app, or connected TV with programmatic video ads, a real-time auction happens. Advertisers bid for the available ad space, and the highest bidder wins the opportunity to display their ad to you as a user. RTB’s lightning-speed nature makes sure that ad placements are optimized for relevance and effectiveness.

Ad Serving and User Experience: The ad is sent to the user’s device once the bidding is done and the auction is won. The user experience is prioritized, making sure that the ad is integrated into the platform and the content seamlessly. Advertisers go all out to create eye-catching and contextually relevant video ads that resonate with users.

Data and Optimization: To improve their targeting, optimize their campaigns, and improve overall performance, the advertisers collect and analyze the data from users. Huge data sets give advertisers the space to make informed decisions, which results in more effective ad placements and higher engagement rates.

Reporting and Analysis: Advertisers analyze performance metrics like click-through rates, viewability and conversion rates after the campaign finishes. This data-driven analysis gives insight for future campaign strategies and the capability to access real-time campaign data allows advertisers to optimize their programmatic video advertising efforts continuously.

Different Types of Video Ads

There are various ad formats, which can cater to different marketing objectives and user experiences. Let’s take a closer look at some of these formats:

Instream Video Ads: These seamlessly integrated ads can be split into three categories based on where they appear when a user is watching an online video: when they appear before the video starts (pre-roll), during the video (mid-roll) or after the video ends (post-roll). What these ads offer is high visibility and engagement opportunities, a common choice for platforms like YouTube where marketers are looking to reach engaged audiences.

Outstream Video Ads: In contrast, outstream video ads play outside of online video content. They appear often in between paragraphs of a text you are reading or in banner ads. Both instream and outstream video ads make use of the autoplay option. Outstream ads are particularly effective at expanding reach beyond video platforms and are a perfect choice for improving user engagement on websites.

In-Display Video Ads: These ads are like a commercial that pops up while you are online browsing, without taking you to another page. They’re designed to blend in with the content you’re already checking out, so you might see one nested in an article, between images, etc. In-display video ads make use of the visual appeal of video content while being perfectly integrated into a wide range of placements.

Benefits of Programmatic Video Advertising

There are a lot of benefits of programmatic video advertising, which revolutionize the way brands engage with audience:

Precision Targeting: To make sure that video content reaches specific demographics, interests, and behaviors, resulting in higher engagement rates, programmatic advertising allows for granular targeting.

Efficiency: Automation removes manual processes and simplifies optimization which allows marketers to put more time to strategy and creativity.

Real-Time Optimization: Adjustments can be made in real-time which are based on performance data that make sure wasted ad spend is minimal.

Cross-Channel Reach: Video content can be distributed across various platforms and devices, including websites, mobile apps, social media, connected TVs (CTV), and over-the-top (OTT) platforms. The versatility of programmatic video advertising allows advertisers to engage with customers across multiple touchpoints.

Enhanced User Experience: Advertisers can create video content that upgrades the user experience by delivering non-intrusive and contextually relevant video ads.

Transparency and Brand Safety: Advertisers having control over where their ads appear greatly reduces concerns about ad fraud and inappropriate placements.

Data-Driven Insights: To have the ability to analyze detailed performance metrics allows advertisers to make better decisions and improve their targeting capabilities.

Cost Per Mille (CPM) Efficiency: Optimizing CPM rates and making sure that ad spend is directed toward the most relevant viewers in digital video advertising is done by targeting specific audiences and the ability to reach high-value audiences with precision adds to maximizing the return on investment (ROI) for advertising campaigns.

Display Advertising Synergy: Seamless integration with display advertising strategies creates a cohesive approach to digital marketing that uses the strengths of both display and video ad tech.

5 Reasons Why JW Player Is The Best Choice

Having the right tools can make all the difference when it comes to programmatic video advertising – and JW Player has all the right tools!

Let’s look at the 5 reasons why JW Player is the best choice for your programmatic video advertising needs:

  1. Craft brand experiences: Over 3600 unique contextual data segments allow for laser-focused targeting – boosting your brand awareness and building up your return on ad spend.
  2. Expand premium video reach: Spanning across more than 12,000 publishing sites with a remarkable 50 billion monthly ad requests, your message can reach audiences far and wide on the internet.
  3. Boost video completion rates: JWP’s secret is in its proprietary tech that analyzes and optimizes engagement which keep viewers glued till the end.
  4. Up Your Viewability Game: Only JW Player can take viewability to the next level by peeking into real-time signals from the video player to accurately predict video viewability.
  5. Keep Your Brand Safe and Sound: JW Player scans the video itself, rather than the page, to make sure your ad runs in a brand-safe environment.

On top of this, thanks to having the best HTML5 web player on the market JW Player brings you a better ad viewing experience by letting you choose from a range of placements for instream ads. While the best-in-class viewer reporting and insights allows you to:

  • Track your top-notch content: JW Player’s viewer reporting reveals the top-watched content that’s making waves
  • Dive deep into viewer ad engagement: JW Player tells you how engaged your viewers are by showing you the metric that matters – percentage completed on average.

If you want to learn more about how JW Player can boost your goals, you can book a meeting and let our video experts answer all of your questions!