Why Programmatic Video Makes So Much Sense for CPG Marketers

keith_lorizioIf you’re a CPG marketer and you still think of programmatic as only a tool for display, there’s good news: Programmatic video is taking off, and, when it comes to CPG brands, video offers the real promise of programmatic.

What makes programmatic video such a natural fit for CPG brands? For one thing, many CPG brands are experienced TV advertisers. They already know how to use videos to tell great stories and make emotional connections with their audiences. In other words, the leap from TV to programmatic video is a natural transition. In fact, programmatic video campaigns can be closely coordinated with TV ad schedules so that the second and third screens are reinforcing or expanding upon the storytelling taking place on the first screen.

It’s no wonder that a June 2014 AOL study found that more than half of CPG marketers expect to spend more on videos in 2015. CPG marketers know that there’s a dramatic increase in the number of people watching videos on their laptops and mobile devices, and they know that they can’t afford to fall behind as video viewing patterns shift.

Better Targeting

And now CPG marketers are increasingly grasping another lesson: It’s not just about getting their videos online but about getting them in front of the exact right people at the exact right time. Programmatic video gives CPG brands the power to target in a way they never could on TV.

Let’s face it: While TV remains a very effective form of mass marketing, it isn’t always the most efficient tool. TV marketers target users according to the given show they’re watching. They can’t target on the individual level. If people are watching TV together, as they generally do, the ads are often wasted on at least some of the viewers.

Programmatic video, by contrast, allows CPG brands to target individual consumers according to all of the things they do online — from the sites they visit, to the products they look at, to the searches they conduct. So, for example, someone who has recently read an article about the flu, or searched for information on flu symptoms, might be a natural programmatic target for video ads for over-the-counter cold remedies or germ-killing cleaning products. Someone who reads nutrition sites might be targeted with video ads for organic foods or other health products.

Better Data and Metrics

The larger point is that we’re constantly giving off intent signals as we browse the web, and now that programmatic video has arrived, CPG brands are poised to take advantage of these intent signals in a big way. And programmatic video offers the tremendous advantage of instant feedback. CPG brands don’t have to sit around and wait months to figure out that a video ad isn’t working. Programmatic videos offer real-time insights so that the creative can be adjusted or targeted to different consumers immediately.

The other bit of good news for CPG brands is that the shift to programmatic video isn’t as complicated as marketers sometimes think. Video can be purchased through multiple programmatic channels — both open and private exchanges — and the exchanges make it easy to serve a single creative to lots of different sites and devices. The measurements, meanwhile, are getting better and better. New and improved metrics, such as multi-touch attribution and Video Completed Rates, leave CPG marketers confident that the money they’re spending on programmatic video is well spent.

It’s worth remembering that these are still early days for programmatic video. But with more and more premium inventory opening up each day, the trends we’re seeing are only going to expand. The coupling of CPG marketing and programmatic video is now for real, and it looks to be a long-term relationship.

Keith Lorizio serves as Chief Revenue Officer at Chango, a programmatic advertising company, purpose-built for the marketer. He is a senior level executive in digital advertising with 20 years of experience leading high performing sales teams. Prior to Chango, Keith was most recently Vice President of US Sales and Marketing for the Advertising & Online organization at Microsoft.