US Video RTB Spend to Hit $667 Million in 2013, Say Forrester

Forrester Report for SpotXchangeA study by Forrester Consulting commissioned by real-time bidding (RTB) supply-side specialists SpotXchange, predicts that online video advertising will continue to grow and will account for 21.8 percent of all US online video spending by 2013. Forrester’s research, titled, ”Online Video RTB Primed for Dramatic Growth,” found that RTB for online video is establishing itself as a significant part of online video buys, with bid-based buying and private exchange driven deals serving as the two primary buying methods.

Key Findings

  •  In 2011, US online video RTB spending accounted for $190 million, in 2012 Forrester predicts RTB spending will increase to $387 million and by 2013, RTB spending will increase to (the strangely precise figure) $667 million – which represents a 251% increase since 2011.
  • The success of RTB in display advertising has laid the foundations for video as buyers who have experienced RTB in online display advertising have been among the earliest adopters of RTB for online video.
  • Similarly, the success of RTB in display created demand for audience buying and automation. The report quotes on buyer who says, “RTB allows us to be smarter about our buys. We can optimize to the right audience and do creative things like message sequencing which are more difficult to do via traditional insertion orders.”
  • CPMs are continuing to rise for publishers, with average CPMs climbing from over $7 in 2011 to $9 by the end of 2012, while premium publishers can expect significantly higher CPMs.
  • The report also found that there are multiple factors holding RTB back, the three main things being: (1) limited transparency and toolset immaturity (in comparison with display); (2) lack of measurement consistency – there are are an array of metrics being used, from video completion or DR metrics, right through to TV-style cost-per-GRP point models; and (3) there are still come lingering concerns around inventory quality and premium publisher adoption.

The study concludes with some recommendations for the future, which are all well-known mistakes that many companies made in the early days of display RTB. Firstly, the report recommended that advertisers and publishers should be careful when making technology investments and choosing partners. Forrester also say that industry standards are going to be critical if there’s going to be liquidity in the marketplace, and educating participants new to RTB is going to be crucial (that last point can’t be stressed enough – RTB isn’t easy to understand and the message needs to be relatively simple).

“We believe this study provides validation to what we already knew; that RTB will be an extremely strong force of online video spends in the coming years,” said Michael Shehan, president and CEO of SpotXchange. “We are seeing very similar percentage growth in our RTB marketplace, and this study proves to us that we’ve had the right focus all along – to give our RTB buyers, sellers, and DSPs the most helpful and transparent information we can about each bid impression, pricing and inventory availability.”

You can download the report here.

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