Marketers and advertisers know that video is one of the most effective audience engagement tools at their disposal. That’s one of the reasons digital video keeps bringing in more and more money – this year, advertisers are expected to spend $11.43 billion on programmatic video alone, up from $9.13 billion in 2017.
But the money doesn’t tell the whole story. Digital video is even more exciting than the ad dollars indicate. Cord-cutting has viewers abandoning traditional broadcast TV and flocking to over-the-top (OTT) streaming and connected TV (CTV) devices, which opens up exciting possibilities for digital advertisers. In this post, we want to tell you about another new technology that builds on OTT and CTV to bring digital video one step closer to dethroning broadcast: programmatic live streaming.
What is programmatic live streaming?
Typically, programmatic advertisers serve video ads on inventory known as video on demand (VOD) – static video content of events that have already occurred. VOD accounts for most content you probably associate with digital video: short clips people post on YouTube, news reports publishers post on social media, or old TV episodes networks post on their sites.
But as its name would suggest, programmatic live streaming gives advertisers the opportunity to serve programmatic ads to audiences watching live events online.
Digital video is already growing quickly, but live streaming could be the development that kicks it into overdrive. After all, publishers and advertisers have long believed that the lack of live TV content on the internet – especially sports – has prevented many from completely abandoning broadcast TV for streaming. But from an advertiser’s perspective, early numbers suggest that digital live streams have much higher video watch times than VOD content. The difference is astronomical when viewers are watching on a CTV device – 42.8 minutes for live versus just 5.1 for VOD.
The bottom line is this: With CTV and OTT adoption rising and live streaming growing in popularity, programmatic live streaming gives digital advertisers the ability to do something that has so far only been attainable through broadcast TV – reach users in their living rooms, on their best video-viewing devices, at the time they’re most engaged. Let’s look more at why that is.
What’s so great about programmatic live streaming?
First, let’s establish what exactly we’re talking about. Programmatic live streaming can include any kind of live content, such as live TV accessed through an OTT service like Hulu TV or live streamed user-generated content like you might find on Twitter Live. But the biggest potential lies in live, mass TV events.
For the purposes of this article, let’s imagine a big sporting event like, say, an NFL playoff game. There are clear benefits to serving an ad in that context:
You have a huge audience paying close attention to the game. When your ad appears on the screen, viewers are likely to be highly engaged.
The ads are inherently viewable because they take up the entire screen.
You’re serving ultra high-quality creatives to your users, many of whom – if not most –are viewing on an HD TV. If you’re a digital advertiser, your ads will probably never look better.
Right now, the only way to get those benefits is by buying commercial break time on broadcast TV. But programmatic live streaming is bringing them to the digital realm at lower prices. Not only that, but programmatic offers something that broadcast doesn’t: Data. Imagine combining the size and engagement of that NFL playoff game audience with the ability to serve ads personalized to the household level. AppNexus is already working with Tru Optik to make this possible on CTV devices.
By combining the reach of traditional TV with the targeting capabilities and lower prices of digital, programmatic live streaming gives advertisers an incredible opportunity to do ultra-targeted video marketing at scale.
What’s the catch? Is programmatic live streaming difficult?
Programmatic streaming isn’t particularly difficult for advertisers who are able to commit resources to it. But there are a few key criteria you need to meet before you can get started.
For one, you need to be working with elite programmatic partners. Live stream events like NFL playoff games can have millions of viewers. That means you need a DSP that can handle millions of concurrent ad requests per second, all happening during the same commercial break.
These events also see lots of variability in the number of viewers. For instance, let’s say there’s a viral moment during that NFL playoff game – maybe Odell Beckham performs one of his trademark touchdown celebrations – and in a matter of seconds, the stream goes from 200,000 viewers to 1 million. We call this the thundering herd problem. In order to withstand such an influx, your DSP needs infrastructure capable of handling a huge volume of simultaneous ad requests.
You also need to provide higher quality creatives for programmatic live stream ads than you do for regular video ads. Publishers know that many CTV users are streaming these events to an HD TV, so they’re going to demand HD-quality ads from you – after all, imagine how jarring it would be for a viewer to go from a perfectly streamed NFL game in HD to a low-resolution video ad that looks like it belongs on an iPhone. While every publisher has different minimum standards, a good rule of thumb is to make sure your programmatic live stream ads have:
Bit rates of at least 15 mb/second. That’s about 10x higher than what a desktop video ad calls for.
2K resolution or higher using the H.264 codec.
AAC audio codec at a bit rate of 256 kb/second with stereo channel audio.
In other words, if you want to play in the TV world, you’ve got to make TV content. At AppNexus, we’re helping publishers enforce their video standards for programmatic live stream ads with a tool that can automatically confirm whether a buyer’s ad specs match the publisher’s criteria in real time during the auction – buyers whose ads don’t pass muster won’t be able to participate.
Finally, you need to keep in mind that all programmatic live stream auctions currently take place in private marketplaces. That means you need to work with a DSP with a robust PMP offering and be prepared to pay CPMs of around $20 to $50.
How do I get started?
Your foray into programmatic live streaming starts with finding the right provider. We’ve been forming relationships with top broadcasters in sports and entertainment and scaling our platform to accommodate their audiences. Contact us here to learn how AppNexus can help you get started with programmatic live streaming or get in touch with your account manager if you already work with us.