Our Latest Thinking
A recent article on digiday.com reviewed some of the myths in the ad-tech space and discussed why they are indeed myths. While reading this, I thought about the applicability of this to the online video advertising space. Let’s analyze each myth separately.
When we talk about online video advertising, I look only at in-stream video ads. And while there is certainly less inventory in video compared to display, video inventory is growing at an amazing pace. Comscore reports that last month Americans viewed 9.5 billion video ads. So basically, in one year, we more than doubled the number of video ad views – incredibly 2.5X compared to April 2011.
Number of Video Ad Views per Month – Based on ComScore’s Monthly Video Rankings Report
In terms of quality of the inventory, I believe it is extremely powerful to get the attention of a viewer for 15 or 30 seconds in a pre-roll ahead of the content the viewer is looking to watch. We’ve seen high engagement rates – without comparison to display ads, which sometimes even appear below the fold. So, at the end of the day, a video ad view is much more powerful than a banner ad impression.
In my humble opinion, publishers should worry if buying is done in the traditional way. Programmatic buying is the only way to maximize the full potential of your inventory. It’s true that today because of the scarcity of good premium content, high-end inventory is easily sold, but with time, advertisers will want to make smarter buys and be willing to pay higher prices for the “right” opportunities.
I believe that the video ad environment is still less complicated than its elder display counterpart. I also believe there will be some consolidation in the next few years. Advertisers would like to manage their advertising budget in a transparent way and be able to transfer funds between channels to areas where they see higher returns per every dollar spent. Today, the market is very fragmented (search, display, social, video, email), but with time, technology platforms will be built to provide a true holistic view on ad spending and returns. Companies, like Google, Adobe/Omniture and others, are already heading in that direction, and video is going to be an integral part of that.
In general, I would like to see fewer players along the value chain and each taking a piece of the action. Fewer hands involved in the process will increase market efficiencies. As they say, “cut out the middlemen.” While many ad-tech companies bring value to the chain, especially in the formative stages of the online video advertising space, it can be hard to distinguish one video exchange from another. Again, ideally, with time as the space matures, there will be fewer middlemen.
The online video advertising world is a few steps behind the display banner space. Whether it is 2 years or 5 years behind, it is clear that video is catching up quickly and we here at SundaySky are certainly excited to help shape the future of it.