• by Craig Berlingo , Op-Ed Contributor, February 17, 2017

Not long ago, the only supply reserved for programmatic display inventory was unsold ad space left over from the direct sales team.

In this way, programmatic had been a race to the bottom-- all the way to the bottom-- until it's remnant.  

Digital ad sales people have become experts at selling display inventory, even working with their data analytics team to optimize content to drive more eyeballs, and through new technologies such as header bidding, they’ve been able to drive up CPMs as much as 40% - 50% in some cases.

Many of these great sales people with programmatic expertise and a history of selling display, often head over to the video side to replicate their success—unsurprisingly, if you consider the current growth opportunity in video—but they quickly realize display techniques don’t work effectively for other types of inventory.

The vast difference between the amount of supply in display compared to the amount of supply available in video means that the strategies and tactics to drive revenue through video advertising are just not the same.

By basic economics, when you constrict supply, you get higher revenue, which is part of the reason premium video attracts such impressive CPMs. However, in display, the way that you maximize revenue is by exposing the nearly unlimited supply of inventory to as many demand partners as possible.

Experts in display transitioning to selling video need to understand the nuances of selling this more valuable inventory, because it’s hindering their success. In the changing landscape, publishers and their salespeople cannot get caught up in the historical precedent they’ve set for themselves, and have to be willing to learn.

According to a recent study by Google, 50% of online video ads that are served on mobile and desktop are never seen, and part of the issue comes down to format and placement.

While publishers and advertisers alike are rushing towards an investment in online video, both sides must think of those investments strategically. Video is inherently premium—for advertisers, not only are content development costs prohibitively expensive, but CPMs are high, and for publishers, there is no such thing as unlimited inventory when it comes to video.

For publishers who have been successful in display advertising to apply their successes in to digital video, they have to understand a few key differences in strategy.

Access is highly coveted in video advertising, and the notion of offering remnant digital video inventory is counter-productive in many cases. This is not the case in display where you are selling in bulk and the CPMs are minimal.

However, Private Marketplaces (PMPs) for digital video inventory offer advertisers direct access to premium brand-friendly content, and because of the high creative costs and CPMs, viewability is an even more important metric for advertisers.

Premium publishers have the opportunity to be more discerning, as a limited but rich pool of video inventory that presents a low risk of ad fraud, is naturally appealing to big name brands that match a publisher’s core audience.

Transparency is truly significant, because when a brand is investing so much in content and placement, they want to remain confident that they are getting a significant return on ad spend. If a premium publisher runs an open auction, and is transparent about who they are, they can expect higher CPMs.   Big advertisers that are risk averse want to know exactly where their ads are being placed.

This is why open communication and the human touch, even in a programmatic environment, are so vital to a publisher’s success. It ensures that advertisers have a better understanding of what exactly they’re bidding on, and where their ads will run.

For publishers, the biggest draw of video advertising is their ability to deliver a much higher CPM compared to the falling yield of standard display advertising. But there are significantly different strategies that publishers would use to turn digital video into a revenue generator compared to display.