Total spending for real-time bidding (RTB) on video ads is estimated to grow by a compound annual rate of 57% between 2011 and 2014, per a new study [download page] commissioned by SpotXchange and conducted by Forrester Consulting. That would outpace the 20% compound annual growth rate for total spending on video advertising, meaning that RTB would account for 24.7% of total spending next year, up from just 8.7% last year.
Total spending on online video advertising is expected to reach $4.6 billion next year, up 28.6% from $3.6 billion this year, according to the report. As the fastest growing segment of online video, RTB is forecast to grow 71% this year to $686 million, and another 66% next year to $1.1 billion.
The study also indicates that RTB exchange-traded video impressions are growing at a rapid clip, estimated to be increasing at an annual compound rate of 61% between 2011 and 2014. Not surprisingly, the growth rate is slowing somewhat (112% last year; 86% this year; and 72% next year), but will remain very strong.
- Premium publishers are still holding inventory while claiming to be sold out in an effort to sustain current high eCPMs.
- Growth in inventory means that publishers will need to open up to an auction-based marketplace, wherein RTB platforms will transform from RTB bidding engines to RTB buying engines.
- Given that there is no “one-size-fits-all model” for programmatic buying, the researchers believe that the marketplace will divide along the following three lines: private versus public; fixed-price versus bidded; and premium versus run of network.
The study also lists 4 main growth drivers and inhibitors.
Growth drivers are:
- “A desire for automated buying and selling”
- “Advertisers’ use of online video to supplement TV campaigns”
- “New measurement methodologies that appeal to brand advertisers”
- Buyers seeking video but at a real-time price”
Inhibiting growth will be:
- “Online video not evolving like display”
- “The infancy of comparable measurement between video and TV”
- “A seller’s market for premium video ad inventory”
- “Buyer confusion about in-banner versus in-stream inventory”