The ad tech industry is buzzing today, particularly in the video space. There’s no question that TV broadcasters are jumping at the opportunity to put their content online as audiences change their viewing habits. Though, along with the spate of new online TV experiences comes new advertising business models, currencies and means of measurement that leaves brands and advertisers with pause. What was once one screen is now many, the one golden standard for measurement is fragmenting, and the means of negotiations are changing.
From viewability, programmatic trading, non-human traffic and online audience measurement, the whole industry is debating which parts of advertising to preserve or replace in order to build a business around the new world of online TV and the huge audiences it attracts.
To discuss these topics, Ooyala recently convened ad tech leaders in the heart of Manhattan to discuss the good, bad and ugly of video advertising. Joined by executives from DIRECTV, Univision, FOX, TrueX (recently purchased by FOX) and Roku, as well as reporters from The Street, TechCrunch, AdExchanger, The Information and Wall Street Journal the group had a candid conversation to discuss trends in the ad tech space for digital TV providers.
Joe Marchese, the recently appointed president of advanced advertising for FOX Networks Group after he sold his company, TrueX, to James Murdoch to the tune of $200 million
, raised his issue with viewability. Marchese said the definition needs work. By definition today an ad viewed on a tiny screen for two seconds, or on a huge screen for 30 seconds is measured the same. Marchese’s point is current viewability metrics don’t properly reap the right revenue for broadcasters. It should be relative to the screen on which the ad is displayed and the amount of time the viewer engages with it.
Yet, viewability gives promise to publishers and their advertisers a more transparent metric that linear TV inherently cannot provide by showing how audiences engage with video across devices. And it seems to be on the upswing. According to a TubeMogul report earlier this year
, viewability for pre-roll ads on mobile was up 14% in Q4 2014.
It is interesting to see the different points of view across the table on programmatic, particularly with premium content. Everyone at the table agreed that programmatic is valuable and necessary for digital TV advertising. Market signs echo the perception and show programmatic is on the rise, Magna Global forecasts $10 billion in TV ad budgets will run through programmatic platforms by 2019
The issue is for what type of inventory should programmatic be used? Kevin Conroy, chief strategy and data officer and president for enterprise development at Univision believes programmatic trading should be left to commodity inventory - the older content that attracts the fewest viewers - and definitely not premium content. On the other hand, Marchese at FOX has a ‘why not?’ attitude. If premium inventory can sell at the same price programmatically as direct sales, why not make the trade as efficient as possible?
One thing that kept all heads nodding was the need for a data-driven approach. Conroy put it best, “In a world driven by data, if you don’t understand how your audience is engaging backed by data you have a huge problem.” He is steadfast on the point saying advertising strategies must be data driven, especially as time goes on. “[Buying and selling ads] will have to do more about the data associated with the inventory versus where the inventory runs. The data field will drive value regardless of where [the ad] is rendered.”
Certainly there are very different strategies in video ad tech today; the video ad world has not yet moved fully from experimentation to concrete strategies. No one has quite cracked the code. Though, we agree, any strategy based on data-driven knowledge will have the upper hand in being the most intelligent about how to price, place and trade its inventory.
Tell us where you think the video ad tech business is headed in the comments below and be sure to follow us at @videomind or @ooyala