Matt Von der Muhll, managing director, SpotXchange APAC, talks to M&M Global about the prospects for programmatic TV, and why the APAC region can be divided into ‘three tribes’.

Programmatic TV is still at “an infant stage” and, given the agility and size of the TV market, will take another four to five years to reach “maturity”, believes Matt Von der Muhll, managing director, SpotXchange APAC.

Von der Muhll was promoted to his APAC managing director role for the video ad platform in September 2013, following his position as country director for Australia.

Highlighting some of the obstacles that mass programmatic TV has to overcome before it can become a reality, Von der Muhll says that “infrastructure is a large obstacle” when thinking about merging broadcast with digital in a “technical capacity.”

He believes that it will be a “steep learning curve” for traditional media and the industry is at risk from “apprehension and understanding” slowing things down even further.

Last year, SpotXchange – a founder partner of Festival of Media Asia-Pacific 2015 – was majority acquired by German TV group RTL. Von der Muhll believes this has helped to open more doors for entering new markets where RTL has a strong presence – especially in Europe and Asia.

He also adds that the acquisition has helped SpotXchange to build TV knowledge at a “much faster rate than other market players” which puts them in a strong position to “offer valuable solutions around the programmatic TV evolution.”

Online video growth

There is no doubt that video has enjoyed a massive surge in growth over the past 12 months. A recent survey by Percolate found that video is on pace to account for 75% of all consumer traffic by 2020.

Von der Muhll puts this increase down to improvements in “accessibility and device quality”, causing a “surge in the consumption of video content on the go.”

Video viewers have also embraced mobile video, with mobile devices and tablets now representing more than 25% of all viewership, according to Percolate.

“Mobile is quickly becoming an integral part of the marketing mix” says Von der Muhll. He believes that video advertisers are looking at this type of marketing as “the next poster child of brand campaigns”, adding that the next big thing for creating immersive experiences will be “when interactive video ads come into play.”

Emerging markets

Von der Muhll describes the APAC region as “a tale of three tribes” when it comes to video: “mature, maturing and new markets.”

He believes that Australia is the most mature market in the region, with Singapore and Hong Kong following close behind. Nations such as the Philippines and China are considered new markets for video programmatic.

Von der Muhll says that markets that have a more modern infrastructure “naturally show the strongest growth across the region”. New markets, on the other hand, still suffer from slow data speeds, which holds back the “uptake of video consumption and consequently the adoption of video campaigns”.

As big publishers in the APAC region start to realise the true potential of adopting a full programmatic approach, they are beginning to invest a lot in technology and resource to ensure that their video content is “adaptable and dynamic” for the appropriate device.

Von der Muhll also expects broadcast networks to invest in catch-up TV, which suffers from poor user experience issues, in order to capitalise on what is currently “under-utilised premium inventory”.

On top of this, he expects more big brands to set up their own in-house trading desks as a result of the heavy part that data is now playing in targeting consumers automatically and more relevantly.

“The role of agencies and trading desks will evolve from control over the licencing for programmatic marketplaces to more of an operations support capacity,” says Von der Muhll.

As a result, the use of data will become more sophisticated, and taking programmatic in-house will “set a new precedent for integrating data sets into programmatic buying”, giving brands the confidence to connect customers and other “data streams”.

And finally, he claims, the viewability and brand safety debates will be resolved. According to Von der Muhll, the market still remains clouded by “conflicting perspectives on viewability”, with each vendor separately building their own verification products in lieu of industry guidelines.

He says that this will change in 2015, with IAB standards on the way, putting an end to unnecessary “inventory wastage” and “market unease”.

SpotXchange is a founder partner of Festival of Media Asia-Pacific 2015