• by Joe Mandese  @mp_joemandese, December 4, 2013

One of the perception problems in the programmatic media-buying marketplace is that the inventory made available via exchanges isn’t precious enough to boost demand from advertisers and agencies, which in turn, will drive prices down as “non-premium” inventory floods the marketplace. It’s hard to argue with that based on version 1.0 of programmatic trading, especially RTB, but my own belief is that the market simply hasn’t matured to the point where there is enough premium inventory working, and enough bidders working for it, to reach the kind of supply-and-demand equilibrium that functions in the open exchanges of other industries, especially Wall Street. We may have to wait and see if my vision comes true, but there are already pockets of inventory where you can see it starting to manifest. And online video is definitely one of them. Mainly because there is a much ore finite supply of video advertising inventory. At least, that’s the perception. And based on the findings of a pretty extensive tracking study of demand from advertisers and agencies, demand for online video inventory is definitely expanding, not waning -- and the sophistication and efficiency of programmatic media-buying -- appears to be at least part of the reason.

"We'll be allocating more of the media budget to programmatic buying of digital video advertising,” says one anonymous marketing executive cited in the release of Advertiser Perceptions Inc.’s latest installment, the “Video Advertising Convergence Report.” The report, which is based on results of an annual tracking study of ad executives -- both advertisers and agency media buyers -- on their perceptions of demand for digital video advertising inventory, doesn’t specifically quantify the role programmatic is having, but there are some telling signs in the stats to support its role.

While overall demand for digital video advertising continues to expand, the expansion is greatest among two sectors most likely to participate in programmatic trading: pure-play video sites and ad networks.