By Bryan Hill
The digital video industry is undergoing rapid change as the companies that control the pipes are starting to buy up companies that control the content. The recent $56 billion deal between Charter Communications and Time Warner Cable, in addition to the $4.4 billion acquisition of AOL by Verizon, signal a future in which all content is streamed over the internet. As internet subscribers surpass TV subscribers, Verizon and Charter are making investments that will ultimately enable them to offer over-the-top (OTT) web and mobile content over multiple screens where the possibility to deliver highly data-driven, unicast, personalized advertising is tantalizing.
These significant deals also highlight the high growth industry of advertising technology, particularly around programmatic trading–the practice of fully automating the buying and selling of digital media. Both AOL and Time Warner have made significant investments in programmatic trading, and it’s now forecast to be a $53.3 billion industry by 2018 and account for 22 percent of total advertising spend. This is on top of the adtech investments we’ve seen from Yahoo (Brightroll), Facebook (Liverail), and RTL (SpotXchange), among many others. As the nascent adtech industry develops, digital advertising players are now thinking about how to better monetize their infrastructure, and maximize their publisher and brands customer base.
The greatest opportunity is proving to be in emerging “mobile-first” regions where households are more likely to have a cell phone than a computer. However, gaining a foothold in regions outside of the Western world is a complicated endeavor for adtech companies, due to speed and connectivity challenges in regions in which they don’t already have a physical presence. To capitalize on the yet-unexploited potential for user acquisition in developing nations, advertisers must consider connectivity solutions to service disparate customers in milliseconds through low latency solutions.