The Battle Against Bad Ads

Around a month ago, Google released its built-in ad filter for Chrome, which blocks ads that are widely considered the most disruptive, while allowing more innocuous ones to show. This could cause major changes in the digital ad market, especially for Google’s platforms, such as search and display ads, as well as YouTube ads.

Given the context of ad blocker usage today, the move is widely considered a strategic one that could benefit the digital ad market in general and Google in particular. With a built-in ad filter on one of the world’s leading browsers, people may be less inclined to buy more stringent software. This would allow publishers, especially Google, to make steady money off their more discreet ads—rather than losing them all to another program.

More importantly, it shows that Google is willing to listen to users’ preferences.

In 2016 there were over 615 million devices running ad blockers of some sort, with growth especially strong among mobile devices, according to a study by PageFair. In addition to browser extensions, users can now get dedicated ad blockers through mobile apps or VPN services. With interruption as the second highest motivator for ad blocking (29%, just behind 30% for security), Google’s concession could be the key to building goodwill.

While YouTube’s video ads may emerge largely unscathed, there’s still much that can be learned from how Google and ad publishers are reframing the terms of engagement. What was once a fight against ad blockers is now a battle against bad ads.

When Ads Go Bad

When should you consider an ad bad? For users, obviously, it’s when it detracts from their online experience. The most widely hated ads are non-skippable video ads and auto-play ads with audio. You know, the ones some advertisers call “high-impact” as a euphemism.

But consider it this way. If users hate your ads, they’re not going to like you any better. So any ad that drives users away—”high-impact” or otherwise—is something that brands and publishers should consider a bad ad too.

Furthermore, experience has shown that you get more out of listening to your customers than trying to fight them. While some websites have tried ad block walls—features that hid content from users until they removed or disabled their ad blockers—customers have proved stubborn.

When faced with an ad block wall, 74% users would rather leave than disabled their ad blocker. And considering that 90% of users have been faced with such a situation, this isn’t merely a hypothetical scenario.

Conversely, users are willing to compromise: 77% of ad block users surveyed indicated that they found some ad formats to be permissible. Skippable ads are likely to tip the balance in advertisers’ favor: research from Treads showed that 79% of consumers would consider disabling an ad blocker if they had the option to skip or close ads.

The takeaway, ultimately, is that pitched battle with the audience does publishers no good. For brands, it could very well do lasting harm. The best way forward would seem to be close to the options Google has chosen, which is finding the middle ground.

Get Good

The question we’re left with is this: how can video ads better satisfy users’ preferences?

Interruption is the main culprit in dissatisfied viewers, so the various solutions have attempted to address it in different ways.

Some solutions focus on content adjustments. These have more to do with the conceptualization and execution of ads on the creative front.
Other approaches have attempted to tackle platform issues. These have more to do with the technology used in calling and displaying ads.
In terms of content, many analysts say that a move to native content is a good idea. The Treads research shows while 48% of users consider pre-roll ads intrusive, only around 23% said the same of native video ads.

For those looking to reach audiences specific to YouTube, however, that’s not much of an alternative. And that is where influencer marketing steps in. Having influencers on YouTube—or other video platforms—benefits you in two ways.

The first is the standard set of benefits you get from influencer marketing. You gain access to a captive, targeted market; your brand is recommended to them by someone who knows how best to reach them, and you get the endorsement of someone they trust. If you partner with a discerning influencer, then you can rest assured that your ads are likely to mesh with their audience.

The second benefit is that by having your ads integrated directly into the video, you get around the problems of the intrusive pre-roll and jarring mid-roll formats. On top of the abruptness of such ads, they usually involve sudden alterations in quality or gaps in loading. Ads that are part of a video will play more smoothly, creating less of a disruption.

The jarring break in pre- or mid-roll ads is something that video platform Brightcove has been trying to tackle more directly. Through a method called “Lift,” they’ve attempted to solve two problems at once: the disruption and quality issues that come from having a video play in the middle of another one; and the signals that allow ad blockers to stop video ads, to begin with.

read more here: vidooly.com

Live, scalable, addressable, ad-supported TV by 2024

To make linear TV more compelling, programmers must cut ad loads and boost relevancy. Can this be done in a way that scales to television-sized audiences? A team of industry experts thinks it can happen before the 2024 Olympics in Japan.

There are just too many ads on TV

According to Randy Freer, CEO of Hulu, television programmers simply don’t value the viewers time enough:

“We overloaded the formats; we overloaded the commercial messages going to consumers. So, they started to say, ‘this is too much…my time is more valuable than that.’ As an industry, I don’t think we value people’s time in a way that allowed them to say ‘I get this, there’s a transaction. I’m not paying as much as I could be paying because my entertainment experiences are being supported by advertising.”

Signs are that television can get the balance right between ads and content. For example, though Hulu offers an ad-free option for $4 more per month most people don’t take it. Moreover, Hulu’s engagement is the highest in the industry. Video streamers watch 29 hours on Hulu per month versus 27 hours for the ad-free Netflix experience.

The key to a more competitive experience is reducing the ad load and delivering ads that are relevant to the user. Programmatic ad selling and server-side ad insertion are key technologies enabling the addressable future of TV advertising. However, delivering targeted ads to tens-of-millions of viewers in real-time is still very challenging. Can the issues be resolved?

According to three experts in video streaming and live ad insertion, the future is bright for live ad-supported television. At Go-Live, an invite-only event to discuss the challenges facing live video advertising, representatives from Yospace, Akamai, and SpotX struck a positive note for the future. I asked where we would be with live and linear ad-supported video six-years from today, in 2024. Here is what each had to say.

Universal ad ID underpins ad workflow

David Springall, CTO of Yospace, sees automation of the buying, selling, and playout of video ads as key to future of live and linear video. By 2024, he thinks it will all be in place:

“It seems logical to me that all advertising sales will be automated by then. There’s going to be the use of computationally intensive technologies like blockchain to give purchasers better protection against fraud which further cements the need for pre-fetch at any real scale. Ad copy management workflows will be made more secure. It is going to be handled in the same way that it is handled on broadcast, through a trusted chain of custody which is consistent throughout the industry. In other words, trafficking ads by a universal ID rather than some arbitrary URL.”

Addressable delivers increased ad value

Kevin Schaum, Senior Director of Advanced Solutions Group at SpotX, struck an optimistic note. He believes the industry will be at full addressability by 2024, and that it will deliver the needed revenue lift:

“The idea of addressability for everybody is a reality. Where there are personalized ads and the media owners, and broadcasters get higher rates because of that. I hope that in the next six years we can work through a lot of the challenges. I believe we are going to get there.”

read more here: nscreenmedia.com

About 50% of Hulu subscribers take $11.99 limited-ads option

A significant number of Hulu’s more than 20 million subscribers are paying for the more expensive limited-commercials option.

That’s according to Fox CEO James Murdoch, who told Recode that about 50% of Hulu subscribers are willing to pay $11.99 per month to cut down on ads popping up during streams. Fox—along with NBCUniversal, Disney and Time Warner—is a part owner of Hulu.

Recode later updated its story to cite insiders who say that more than 60% of Hulu subscribers still take the less expensive, ad-supported tier.

Earlier this month, Hulu revealed that it now has more than 20 million subscribers, but the service has yet to reveal how many of its subscribers are opting for the $40-per-month live-TV service.

Hulu also said it has grown total engagement by more than 60% and that 78% of viewing on the service takes place in the living room on connected TVs.

“Hulu is the complete TV experience for consumers, offering both live and on-demand programming and more consumer choice than ever before,” said Hulu CEO Randy Freer in a statement. “We are the only place that delivers award-winning content, ad loads less than half that of traditional television, with ads that are always viewable and always in a brand-safe environment—and we are leading the TV and advertising industries into the future.”

The strong uptake for Hulu’s more expensive tier with limited commercials is similar to the numbers CBS has been able to put up for its All Access streaming service.

Earlier this month, CBS said about one-third of its 2.5 million All Access subscribers are opting for the $9.99-per-month ad-free tier of the service.

Joe Ianniello, chief operating officer at CBS, said the fact that consumers are willing to pay more for a premium channel experience with CBS shows gives the company some added leverage when negotiating things like carriage and distribution.

read more here: fiercecable.com

IAB says revenues up 21% to $88B in 2017. What they don’t say: ‘not for you’

The IAB (Interactive Advertising Bureau) is out with its Q4 and 2017 year-end state of the digital advertising industry report. In a repeat of the past several years, digital advertising revenue is up. There was growth across formats and devices. And while the IAB doesn’t name names, Facebook and Google continue to suck up most of the oxygen in the room.

The data for the IAB report is collected from IAB member companies and publicly available corporate data by PwC.

Overall, digital ad revenue grew 21.4 percent to $88 billion in 2017. To put that in perspective, PwC says the revenue change in digital seen last year is greater than in the newspaper industry as a whole.

Digital video increased overall share in 2017, chipping away at search, to $11.9 billion, up 33 percent from $8.9 billion in 2016. Search still continued to grow at 17.5 percent in 2017, to $40.6 billion. Banner revenues, which includes banners, sponsorships and rich media, totaled $27.5 billion in 2017, up 23 percent from 2016.

Mobile continues to gain share, accounting for 57 percent of the overall digital ad pie in 2017, to reach $49.9 billion. That’s more than all digital ad revenues in 2014. Mobile has seen a compound annual growth rate (CAGR) of 71.4 percent since 2010. Mobile share grew across all formats, as shown in the slide from the IAB webinar on the report.

Despite mobile’s ascendance, desktop revenues still grew in 2017, with a CAGR of 6 percent over 2016.

CPMs also increased in 2017, according to data from SQAD.com shared by the IAB. CPMs for in-stream video were up 3 percent 2017 year over year to $25.22, and CPMs for display rose 6 percent to $14.72 on average.

Social media isn’t broken out as a format, but its share of revenue topped 25.2 percent in 2017, reaching $22.2 billion. Facebook, of course, accounts for the bulk of social media advertising spend in the US.

Duopoly dominance
The IAB doesn’t release data on specific companies, but the top 10 companies commandeered 74 percent of total revenues. That share among the top 10 has remained relatively consistent, says the IAB. The elephant in the room is the fact that the top two — Facebook and Google — now make up the majority of that 74 percent.

During the webinar announcing the IAB report, Brian Wieser of Pivotal Research shared his analysis of Google and Facebook’s share of the market in the US. Acknowledging there are “a lot of assumptions” that go into these estimates and that his analysis is based on gross revenue, Wieser said, “It seems clear they are taking share. [Google and Facebook] probably accounted for 90 percent of the growth. The rest probably accounted for 10 percent or so.” Weiser pegs the duopoly’s share of US ad revenues at above 70 percent.

read more here: marketingland.com

Consumers Are Now More Likely to View Ads Online Than on TV

GroupM unveiled its 2018 “State of the Digital” report, which predicts where people worldwide are expected to consume content in the coming year. And for the first time, the WPP network sees online surpassing every other vertical—linear TV, print and radio—in terms of where people will choose to spend their time with media.

The study, when weighted by expenditure, estimates that consumers will spend an average of 9.73 hours per day with personal media in 2018, up from 9.68 hours in 2017. GroupM predicts online to take a 38 percent share of total time spent with media; for the first time, linear TV trails behind and is expected to end the year with a 37 percent share. The group predicts radio and print to then take 18 percent and 7 percent shares, respectively.

Last year, linear TV held a 38 percent share over online’s 36 percent.

GroupM noted in the report that it wasn’t able to accurately measure TV’s online distribution, so those numbers were “lost in that online aggregate.”

The report likened the rise of digital ad expenditures to that of global e-commerce spend, which it also sees jumping considerably in 2018. Based off the 35 countries that supplied e-commerce totals for this study, GroupM predicts the dollars spent online to climb 15 percent to $2.4 billion in 2018 from $2.1 billion last year.

This is also the first time GroupM predicts e-commerce shopping to “grow notably faster” than Internet usership, which is estimated to climb 4 percent in 2018, compared to 6 percent in 2017.

Across the 35 reporting countries, the network estimates 47 percent of all online display investment to be transacted programmatically in 2018, from 44 percent in 2017 and just 31 percent in 2016.

GroupM’s research also touched on which of the hot-button issues around emerging tech are really top of mind for marketers, according to employees surveyed within its WPP network. For example, respondents described blockchain as a “slow, clunky and expensive” tool they don’t see as practical just yet.

“Blockchain’s main attraction is its distributed ledger, which tells everyone everything and thus presents the opportunity to reduce inefficiency or cheating,” Adam Smith, GroupM Futures director, said in a statement. “However, its Achilles’ heel is the need to keep every participating computer updated with everything all the time, and that’s too slow for a real-time world.”

The study’s respondents within GroupM reported improved development around AI and data use, although they admitted the need for further improvement on the latter. Those respondents brushed off the threat of clients in-housing their work, saying that it’s “more often talked about than done.” GroupM employees surveyed “reported [more] hybrid arrangements” than full in-house operations, “with clients often happy to take on strategy but leave risky and expensive execution to agencies.”

Clients are hiring more digital staff in-house and leaning more on specialist agencies than generalists, according to the study.

In a statement, GroupM global CEO Kelly Clark listed automation and talent as the “big themes in advertising’s current revolution.”

“One of the downsides of specialization is the increase in specialists who know more and more about less and less,” Clark said in the statement. “We have to use automation to liberate brand power so talented people can look across the entire media ecosystem to help clients optimize short-term results and create long-term value.”

read more here: adweek.com

YouTube Ads Aim at Cord Cutters

YouTube wants to siphon off more advertising dollars out of the traditional TV ecosystem.

Google’s video platform is promising Madison Avenue new ways to reach people watching YouTube on TV screens — as well as target YouTube ads to cord-cutters and consumers who don’t watch a lot of traditional TV.

YouTube says connected TVs represent its fastest-growing device category, thanks in part to the growth of YouTube TV, its over-the-top “skinny bundle” pay-TV service launched last year.

While overall mobile accounts for over half of all YouTube videos viewed, users now watch more than 150 million hours daily of YouTube on television screens worldwide. That’s up 50% from 100 million hours per day in the past six months. (One year ago, total viewing on YouTube was around 1 billion hours per day; Google declined to provide an updated figure.)

“We are seeing more YouTube being watched on TV screens, and more TV content being watched on YouTube — it’s the ultimate convergence of video,” said Debbie Weinstein, managing director, YouTube/video global solutions at Google. “Advertisers are saying, ‘What are you building for me to reach YouTube viewers on TV?’”

Here are the three ad programs YouTube is rolling out:

“Light TV viewers” targeting:

In the next few months, YouTube will introduce a new audience segment in AdWords called “light TV viewers.” These are consumers who, based on Google and YouTube’s metrics, watch most of their TV and video content online — and are much less likely to subscribe to pay TV.

YouTube on TV screens:

For the first time, advertisers will be able to reach audiences specifically on television screens through AdWords and DoubleClick Bid Manager. That option will join the existing ability to target YouTube viewers on smartphones, tablets, and desktops.

YouTube TV ad inventory will be available through Google Preferred: So far, Google hasn’t sold ads for its OTT “virtual pay-TV” service. Starting in the fourth quarter of 2018, inventory on some U.S. cable networks on YouTube TV will be available as an extension to Google Preferred, the premium ad program for the top 5% most popular YouTube channels.

The “light TV viewers” targeting — which will span ads across all device platforms — is particularly interesting to advertisers who are trying to reach audiences that have become very hard to find on conventional TV, Weinstein said. More than 50% of U.S. consumers aged 18-49 in U.S. are “light” TV viewers (in the bottom one-third of the total TV audience based on minutes viewed), according to Nielsen. However, 90% of that group watches YouTube videos, according to Weinstein.

Meanwhile, Google is looking to dial up the ad monetization on YouTube TV. First launched in April 2017, YouTube TV is now available in 99 of 100 top U.S. designated market areas, reaching some 85% of the nation’s TV households. As you’d expect, most viewing of YouTube TV is on TV, with television screens accounting for more than 70% of the total watch-time.

Starting later this year, YouTube TV ad inventory will be added to Google Preferred. Weinstein noted that YouTube TV ads bought through Google Preferred will be dynamically inserted, letting advertisers target ads based on demographic profiles rather than just showing everyone the same ad as with the majority of traditional TV buys.

This January, YouTube said all videos in Google Preferred will be reviewed by human moderators before they’re eligible for monetization. That came after a series of “brand safety” blowups in the past year, when advertisers discovered spots unexpectedly running against hate speech and other content they didn’t want to be associated with.

read more here: variety.com

Video Accounts For 50% of Twitter’s Ad Revenue

Twitter has been pushing hard into video and its paying off. The company announced today that it has beat forecasts for Q1 2018, helped by a 53% jump in international revenue, which was led by strength in the Asia-Pacific region. Twitter attributes revenue growth in the region being primarily driven by growth in video in Japan and performance ad products in its China export market.

The company says that video, which was its fastest-growing ad format in Q1 (again), accounted for more than half of its $575 million in ad revenue for the quarter.

Total ad engagements for the company increased 69% year-over-year, resulting from increased aggregate demand, continuing mix shift toward video ad impressions, and improved CTR, which grew on a year-over-year basis across the majority of ad types as ad relevance continues to improve. CTR also benefited from the ongoing growth of more engaging video product features in Q1 — such as the Video Website Card and Video App Card — says the company.

Going forward, the company plans to remain focused on online video to drive revenue, it also says it will introduce new ways to buy ads on the platform. Other revenue priorities for Twitter include improving its core ad offerings through better performance and measurement, including ad platform improvements, self-serve measurement studies, and third-party accreditation; and continuing to grow DES revenue through its product and channel segmented go-to-market approach.

Other key numbers from the earnings report:

– Increase of 6 million monthly active users from the previous quarter
– 336 million monthly active users Total
– $665 million in quarterly revenue (down 67 million from the prior quarter)
– $575 million in advertising revenue
– 69 million monthly active users in the United States
– Profit was $61 million
– Cost per engagement (CPE) was down 28 percent from the year prior

Types of Videos Facebook Won’t Monetize

Facebook is expanding pre-roll video ads to more areas on the platform. The company is also clarifying its monetization policies giving additional detail on the kinds of videos that aren’t eligible for ads.

The company has announced that after testing pre-roll ads for shows in its video section, Facebook Watch, it will be expanding the test to other places where videos can be found, like in search results or on a Facebook Page timeline.

In addition to previous ad-eligibility guidelines released last fall that restricts ads from running on certain kinds of content — including videos that have sexual themes, depict violent or illegal activity, contain inappropriate language, or misappropriate children’s characters — Facebook will not monetize certain low-quality videos or publishers who engage in sharing and distribution schemes.

“We are focused on growing payouts for creators and publishers who develop engaged and loyal audiences and are working on growing payouts for partners who develop loyal, engaged viewing,” the company wrote in a blog post.

Other types of video content ineligible for monetization include:

Manufactured sharing and distribution schemes:

Content partners with paid arrangements for Pages to methodically and inorganically share videos can no longer monetize views originating on the third party Pages. According to Facebook, this behavior optimizes for distribution rather than quality and does not build deep relationships between people and content.

Formats unsuitable for an ad:

When content partners use video formats that aren’t actually video – like static or minimal movement videos or content that just loops – they are creating experiences not intended for ad break monetization, says Facebook. People do not expect to see ads in this type of content, and this is not the type of content advertisers want to run ads in.

Limited editorialization of content:

Facebook says that pages primarily distributing videos of repurposed clips from other sources with limited editorialization do not foster engaged, loyal communities in the way that Pages that produce and publish original, thematic or episodic videos do. “While we will not be taking immediate enforcement action on this issue, we want to signal to content producers that this is a programming style we will more deeply evaluate over the coming weeks and months to assess what level of distribution and monetization matches the value created for people,” the company wrote in the blog post.

read more here: thevideoink.com

Snapchat Ad Length: In Average about 8 Seconds Long

Advertising intelligence company MediaRadar has analyzed Snapchat brand activity and issued a report showing that the average Snapchat ad length is eight seconds.

No other social platform makes it as easy to bypass video ads, so marketers need to grab the viewers’ attention by the first frame. Simply tapping on a Snapchat ad lets viewers bypass it and get on to something they’d rather watch. Some Snapchat advertisers are running ads that are less than 5 seconds long, says MediaRadar. The majority of ads on the platform-60 percent-are between 8 and 10 seconds long.

MediaRadar also looked at where advertisers put their ads on Snapchat. Some of the platform’s Discover channels are far more popular than others. For example, the iHeartRadio channel was the most popular, getting placements from 61 advertisers. The CNN channel was the least popular. It’s no surprise, then, that CNN ended its Snapchat Discover channel in late December.

The data MediaRadar looked at was for ad placements carried out through its platform from November 2017 through January 2018. In that timeframe, 397 brands placed video ads on 52 Discover channels. The average buy was for 4 or 5 channels, and the largest was for 29 channels.

“We found almost no examples of a brand buying across all of a single publisher’s Snapchat channels. For example, no advertiser buys both Wired and Vogue (Condé Nast), or Cosmo and Esquire (Hearst). This reinforces the idea that buys are gender targeted,” MediaRadar’s report says.

Brand categories advertising on Snapchat most often are media and entertainment (48 percent), technology (13 percent), and retail (12 percent).

For data on much more than just the average Snapchat ad length, download “MediaRadar’s Snapchat Snapshot” for free.

read more here: onlinevideo.net

US TV AD SPENDING TO FALL IN 2018

DIGITAL VIDEO CONTINUES DOUBLE-DIGIT GROWTH; OTT SPEND RISES
TV ad spending will continue its decline this year, according to eMarketer’s latest US advertising forecast.

With cord-cutting accelerating and over-the-top (OTT) viewing on the rise, outlays on TV ads will slip 0.5% in 2018 to $69.87 billion. As a result, TV’s share of total US media ad expenditures will drop from 33.9% in 2017 to 31.6% this year.

TV ad spending will see a slight uptick in 2020 (due to the US presidential election and Summer Olympics in Tokyo), but it will sink back to negative territory in the following years and fall to less than a quarter of total ad spend by 2022.

“The shift of audiences to OTT viewing is changing the climate of the TV ad market,” said eMarketer senior forecasting director Monica Peart. “As ratings for TV programming continue to decline, advertiser spending will also continue to see declines, especially in years that do not boast major events such as presidential elections and Olympic games.”

Meanwhile, total digital ad spending in the US will climb 18.7% this year to $107.30 billion. OTT platforms, which have a small but growing share of the market, will continue to play an important role. This year, Roku’s US ad revenues—mostly video but including some other display formats as well—will surpass $293 million, up 93.0% over 2017. And Hulu’s US ad revenues will increase by more than 13% to reach $1.12 billion. Overall Hulu’s ad business is increasing as well as the company revenue from subscriptions.

“Over-the-top platforms are growing in number and size, and many compete directly with pay TV by offering bundles of live channels at attractive price points,” said eMarketer principal analyst Paul Verna. “Consumers who want to cut or shave the cord now have a wealth of options that didn’t exist a couple of years ago. And we expect the offerings to become even more robust as more players enter the market.”

read more here: emarketer.com