Mobile Video Monetization Strategies

Everyone in the industry is wondering  when mobile video will begin to be monetized properly (by which we mean in proportion to the time consumers spend watching it).As part of our work on the IAB Digital Video Committee, we attended a meeting  to learn what may be holding the industry back from getting the kind of ad rates for mobile video that it deserves. Three different issues emerged from the meeting: how publishers feel about available video formats (often unsuitable for mobile), the state of cross-device measurement (just getting started),  and the unfamiliarity of TV media buyers with the digital video environment.

You may already know that ZEDO pioneered a format called InArticle, which later was reinvented by Teads as “outstream video.” While this format has been highly successful for us, we know it is not for everyone, and we  heard two publisher panelists (Meredith and Weather Channel ) say that they will never run out stream because they don’t like the user experience on their sites. They talked about 15-second preroll as preferable, although they admit that most advertisers send them 30-second spots. These publishers are pushing back at agencies and brands who try to use existing TV creative, esp. 30-sec spots, on mobile  have pretty good statistics on completion rates, and they feel shorter is better. In fact, one attendee suggested five-second video, just to get the brand’s name in front of the audience without offending it.

Because there is a relative scarcity of pre-roll another format publishers are testing for video is mid-roll, Facebook is rolling these ads out right now to see how well they are accepted.

At ZEDO and ZINC, we are testing our own version of pre-roll, as well as a new format we call “polite Swipe Up.” Our objective with our formats, which achieve high visibility and engagement, is not to antagonize site visitors. In the Digital Video Committee, several publishers complained that group M’s demand that all Ads be 100% viewable means that they waste inventory and annoy viewers by upping the frequency of ads while trying to  achieve those viewability numbers.

The issue of cross-channel metrics also came up in the meeting, because marketers are only beginning to be able to follow consumers from device to device and from home to work. Before investing in digital video, they need more assurance that they are following the same customer from display to video to TV.

And then there is the “people problem.” TV media buyers often don’t buy digital video, or want to pay less for it, because they don’t know how to buy it. This is such an industry-wide problem that IAB is preparing a Digital Video Guide and a curriculum, and will hold workshops and classes to educate media buyers. The guide will be introduced during the Digital New Fronts, and the education programs will begin shortly thereafter.

 

 

 

 

Content, Commodification, and Convergence

We’ve reached peak content. There are now too many good TV shows, Netflix, Amazon and Hulu shows for anyone to keep up with. There’s also a glut of multimedia content aimed only at Millennials, including such sites as Buzzfeed, Mic, and Refinery29, or focusing on fashion. Every segment, vertical or horizontal, is feeling the pinch. Too much being produced, not enough time to consume it, a commodification of the attention economy.

Something will have to give, since there are only a finite number of advertising dollars to support all the content being produced. And where are most of them going? To Google, Twitter, and Facebook, the people who have the enormous audiences. Now, more than ever, advertisers worship scale. It’s not enough to reach the 5 million readers who really like what we’re creating; to get advertising dollars publishers have to reach 100 million readers. Even Yahoo, which does reach 100 million users daily, sees its existence threatened.

For publishers, survival is going to require convergence. Google, Facebook and Twitter already symbolize on side of that convergence: convergence of the audience. Although Twitter has “only” 300 million users, that’s more than any pure play media property can claim. And Facebook, with over a billion daily actives, is the big Kahuna. Last year, with the release of its Instant Articles feature, it began to draw traffic away from, rather than refer traffic to major news sites. The trend will continue in 2016, accompanied by Google Amp pages. As consumers, we will receive news curated by companies like Apple, Google, Facebook, and even Amazon, whose Prime offering is beginning to define what video people watch.

Because Facebook is curated by an algorithm, however, it can’t satisfy all advertisers. Those who want to reach niche audiences must move in another direction. They must create unique and differentiated copy and target precisely the audience they want. Extreme sports is an example of movement in this direction, as is Glenn Beck.

It doesn’t take rocket science to predict that 2016 will be a year of both media and ad tech convergence, as sites aimed at Millennials seek to grow their audiences by acquisitions, and niche sites buy up their competitors. Tech journalism sites have already begun to combine, as last year’s purchase of Recode by Vox signaled. More of that is destined to happen, lest sites be forced to shut down like GigaOm. What will we end up with?

In a strange way, we’re going to end up where we began at the beginning of mass media. A few major networks will aggregate most of the consumer traffic. They won’t be ABC, CBS, or NBC; instead they may be Facebook, YouTube, and perhaps Twitter, Apple, or Instagram. They will certainly be mobile. And then there will be the verticals: sports, fashion, travel, finance, and tech. These will be like the old industry trades, with highly specific and differentiated content perhaps produced by brands like Red Bull, GE, or BMW.

The term “publisher” may come to mean something entirely new: a content creator who sends content to an audience aggregator. It’s going to be another fascinating ride.

 

 

 

 

 

 

Mobile Digital Growth Worldwide

The balance of power in advertising markets is changing as consumers in developing nations begin to come online and on mobile in ever-increasing numbers.It’s not much of a surprise that the UK was the biggest advertising spender in Europe last year. “According to the AdEx Benchmark 2014 report, by IHS Technology and the Internet Advertising Bureau, €8.9 billion was spent on online advertising in the UK in the 2014 calendar year (or £7.19 billion, using average exchange rates in 2014).” But the UK will lose its position as a significant spender before the next five years are up.

In Europe, France and Germany are the next biggest spenders. But Asia-Pacific is the fastest growth market, “Digital advertising spend in Asia-Pacific is expected to rise 30.3% to total $46.59 billion this year, according to eMarketer’s latest estimates of digital ad spending worldwide.” And in fact, Asia-Pacific is, after North America, the second largest digital ad spender worldwide.

Part of this is simply the billions of Chinese coming online. China now has the largest share of spending of any single country at about 50%. But Indonesia is growing the most quickly, expected to grow by 98% this year.  Advertisers in Indonesia are still investing in print, but the arrival of users on smart phones is going to change that. Indonesia will be an example of how emerging countries leapfrog steps still being executed by their more developed neighbors. Indonesia will pass India in 2016 and pass South Korea in 2018. China, of course, will still post impressive growth.  By 2017, digital ad spend in Asia is expected to surpass that of the North American market.
Digital Growth in APAC

We Are Social and IAB collaborated on an intensive study of mobile digital growth in APAC, and the SlideShare of the report is here. To the left we list the most important growth numbers since 2014. You can see where this will take us very quickly.

To prepare for our customers’ response to this growth opportunity, we recently opened a Singapore office, and are about to open one in Australia. Since we have always been a big presence in India,  we feel we have APAC covered. We’ve got the publishers, the market, and the mobile formats.

Good-bye :30 Spots, Hello Digital Video Creative

Seriously? Digital  is now the second biggest advertising market and we’re still using 30-second spots? Has anyone really thought this through?

The research on whether people will watch video online, and for how long, is in. While we used to think two minutes was the outer limit, we now know that it’s over five for a good story, especially on a tablet. Younger people have moved from TV to digital in large numbers, and even little kids reach for the tablet before the TV. In theory, this could change the delivery of advertising, allowing for both longer and shorter ads, and unleashing new powers from creatives.

To keep up with their customers, brand advertisers are shifting their metrics from CTRs to completion rates. Completion rates are not a function of time; they’re a function of good story telling. A good story keeps people engaged and produces more brand recall than any 3o-second spot ever did. If we get away from the limitations caused by time, we’ll be a lot better off. Without the temporal limits of TV, we can tell different kinds of stories.

Mobile is a great place for video ads. Buzzfeed founder Jonah Peretti once said that his site was for the bored at work, bored in line audience, and those are the people who will watch a video that tells a good story, even if it’s conceived and even executed by a brand. In fact, IAB just did a study of video watching on mobile devices:

 many respondents said that they’re watching more video on mobile devices than they were a year ago, including 50 percent of those surveyed in the United States, and 42 percent in Canada, New Zealand and South Africa.

They’re not watching 30-second clips, either. In fact, 36 percent of respondents said they watch videos that are five minutes or longer on a daily basis. (That’s not a majority, but it’s more than just a tiny sliver of the audience.)

The IAB says that viewers in China are particularly open to watching movies and TV episodes on their phones. In addition, 37 percent of respondents in China and 35 percent in Singapore said they’re watching less TV due to watching more mobile video.

We suspect that next year publishers will be seeing many new in-app and in stream formats that don’t look like 30-second spots.

 

Does Video Advertising Work?

The consensus forecast in the ad industry is that video advertising has been the big opportunity for 2015. Although “cord cutting” is not increasing as quickly as some trend spotters have predicted, we have now bred a generation of adults who have never been connected by a cord . Millennials simply never order cable in the first place; they use their TVs, if they have them, as giant displays for Chromecast or Airplay.

We’ve known for a while that Millennials also watch TV on their mobile devices, and that they were willing to watch videos longer than two minutes.  In fact, this year all other market segments seemed to go mobile at once. For a while the ad dollars didn’t follow the viewer behavior, but now Adexchanger’s Data Driven Thinking columnist says, “…based on… discussions with major brands, agencies and advertisers, TV advertisers hope to shift roughly 30% of their $70 billion TV ad budgets to digital video by 2015. That would increase the US market to $21 billion, up from $6 billion in 2013.”  Based on information half way through the year, the actual numbers will be bigger.

These budgets are big enough that we must now begin to measure how well digital video advertising works. The rating system for TV, GRPs, hasn’t been a good measurement for quite a while, although we didn’t have any reason to complain about that before digital advertising unlocked the power of actual data. When TV first came on the scene, GRPs measured who was watching a show, and thus you’d know who was watching the ads. But since 1999, when Replay TV first introduced the DVR with its ability to skip ads, GRPs have become less and less an accurate measure of whether a TV ad led to a sale.

We hope that with the tsunami of ad dollars to mobile video, we won’t make the same mistake we did with digital display — turn it into a platform for performance advertising and drive publisher revenues down through the floor. It has taken us more than a decade to recognize that brand lift is a valid objective for online advertising. Now, with mobile video, we should come around much faster to realize that the best way to measure online video ROI might be against TV ROI, which is an apples to apples measurement. TV, of course, has been justified for its capacity to produce brand lift as well as just performance. Digital video, executed well through formats like our inArticle video,  will do the same.

 

 

ZEDO Releases New Version of Popular InArticle Format

Good products are often improved once they have been introduced to customers who can give valuable feedback. That has certainly been the case with ZINC’s InArticle format, which launched a mini upgraded version last week.

When it hit the market, InArticle immediately became one of ZINC”s most popular high impact formats, because it allowed advertisers to scale campaigns with unduplicated reach. And now listening to customers has made InArticle even better. A new design, coupled with an entirely new version of InArticle for desktop browsers, makes this ad unit work better than ever before. The ad loads politely, does not autoplay audio, and clicks to full screen.

Closing the full screen takes the user to a a landing page, a feature that’s on by default but can be turned off. Sound comes only on mouseover, and the unit can be closed by clicking a close button on the top right hand corner. Sound starts only upon mouseover.

For VAST, the video continues to play in a smaller (160×120) window in the right rail when the user scrolls past.

Earlier versions of InArticle for Desktop had used an outsourced player, which we thought was too slow, because it downloaded a 234KB file to the desktop. It also had only limited customization capability.

We made the decision to build our own player, which greatly improves the performance of InArticle. InArticle 3.1 is faster than ever before, too. Because it stays ready with the video ad, it is 2x faster to deliver the ad and makes for an improved overall experience.

Version 3.1 of InArticle runs on ZEDO’s own flash player, which is VAST 3.0 and VPAID 2.0 compliant and only 73.5 KB in size. It also has an API-based design, permitting greater customization.

The unit works the same way it always did, only better. We’ve answered some customer concerns with this version. The unit now uses the full width of the article, can be skipped using a close button, and keeps the aspect ratio intact. A 16:9 ad will now always be shown with the 16:9 dimension. 4:3 ads will be shown with 4:3 player dimension only for an article width 6 pixels or less, and this value is configurable. In the leave behind, if the video is finished a complete view is counted.

When the user scrolls back to the top of the page, the leave behind disappears and the larger unit continues playing. For VAST, after the video is finished the unit stays open with an advertiser messages that clicks to a landing page. There is also a replay icon that appears at the bottom right after the video is finished, although if the user replays it, no event is tracked.

If a publisher prefers, the unit can also be configured to close after the video is finished, although this is not recommended. Version 3.1 tracks all IAB defined VAST events.

Version 3.1 also enables passbacks. If the VAST tag returns a NULL response, the unit passes back and serves the next partner. If the VPAID tag fails to serve a video, the unit passes back and serves the next partner, and if the VPAID tag returns a NULL response the unit passes back and serves the next partner.

We have several campaigns running the new version already. For more information contactadsales@zincx.com .