Companies Rethink The TV Ad Model For OTT

The advertising model for traditional, linear television is actually pretty simple. Networks air TV shows, and those shows have regular commercial breaks. In total, they typically end up being around eight minutes of commercials every half hour, and 16 minutes in an hour.

Now, as consumer viewing shifts to over-the-top video — a format dominated by the ad-free giant Netflix, and the limited-ad giant YouTube — companies are realizing that those old ad models just won’t fly.

“It is clear to us that consumers are not going to stand for 16 minutes of ads per hour,” Scott Rosenberg, the GM of Roku’s platform business, said at the Business Insider Ignition conference last week. “The consumer we are serving is highly empowered, they have lots of screens to choose from — ad-free experiences to choose from. While they value free, there is a tolerance. It is very clear that ad loads will come down, and the ads will have to become smarter and more engaging.”

So what can companies do? Better targeting and more relevant ads are a start, but so are ads that are not interruptive to the viewing experience. Roku will be adding search-based and discovery-based ads in the coming months, and is looking at other formats as well.

Other companies, such as Hulu and AT&T, are looking into other options, including “pause-vertising,” in which an ad would begin to play after a user presses pause on a show they are watching.

The logic is that as consumers increasingly binge-watch shows, they are increasingly pausing the action to grab a drink or use the bathroom. That could present an opportunity for certain advertisers.

While some consumers may be annoyed by these types of ads, they are certainly less interruptive than traditional commercial breaks, and are part of the value exchange of ad-supported OTT.

“Ad-free is a great product, if you can afford that type of viewing experience, it gives you back some time,” said Hulu CEO Randy Freer at the Business Insider event. “What we really like is that we can offer choice. We can offer a $0.99 package, or our Spotify bundle to consumers, and that is ad-supported, they understand that, and it has less than half of the commercial time than you have in traditional markets.”

Value is the key word here. Rosenberg says that consumers clearly want free ad-supported options to complement their paid subscriptions, and that “free” is the most-searched for term among Roku apps.

“I think many of us in the industry have been trying to figure out what the balance of ad-supported and ad-free viewing will be five years from now,” Rosenberg says. “It is very clear to us now at Roku that consumers are cutting and shaving the cord, not just because they are looking for more choices, but because they want value, so free is a really important selection criteria as consumers get into OTT.”

read more here: www.mediapost.com

YouTube and Facebook taking lion’s share of online video ads, but TV dominates

YouTube and Facebook account for the majority of online video advertising in Europe, but the vast bulk of video advertising still goes to television, according to a report by the European Audiovisual Observatory.

facebook Youtube TV ads

According to the report, Online Video Sharing: Offerings, Audiences, Economic Aspects, which cites a number of third-party data sources, YouTube and Facebook together take a 56% share of the European online video advertising market. In 2018, YouTube took an estimated 32% of the market, with Facebook taking a 24% share. Broadcasters took a 20% share of the market collectively.

Despite the dominance of YouTube and Facebook in online video advertising, the vast bulk of video advertising – 91% – went to television in 2016. However, the growth rate of the online video advertising market is much higher than that of the TV ad market – 21.4% between 2015-16 compared with 2% for the TV advertising market and 11% for the overall online advertising market.

The report also noted that 6-15 year-olds in the UK spend about 20% of their screen time watching online video clips, compared with about 45% watching broadcast TV, 12% watching recorded TV, 6% watching catch-up TV and 10% watching paid for streaming or download services. Over 16s, by contrast spend 63% of their screen time watching broadcast TV, 17% watching recorded TV, 6% watching catch-up TV and 6% watching paid for streaming or download services, and only a very small amount of screen time – 2.9% – watching online video clips.

YouTube is used at least once a month by 93% of western European consumers, according to the report.

Despite the growth on online video and the rise of SVOD, the report cited Recode data from 2017 that shows traditional media companies still account for the bulk of expenditure on original non-sports content, with the top four spenders – NBCUniversal, Time Warner, Fox and Disney all being traditional players, led by NBCUniversal, which spent US$10.2 billion. Netflix comes in at number five with expenditure of US$6.3 billion, while Amazon is number seven with US$4.5 billion. Among technology and social media companies, Apple and Facebook were the top spenders, coming in at number 13 and 14 with spend of about US$1 billion apiece.

read more here: www.digitaltveurope.com

How to combat growing ad fatigue amidst the rise of OTT video

Show of hands: How many of you have watched TV via the internet?

Keep your hand up if you’ve watched the same ad repeated multiple times, or even ads for competing brands, within the same ad break while watching online TV?

I suspect many of you still have your hand raised. With explosive growth in over-the-top (OTT) video offerings — such as catch-up TV, live TV streaming, and video-on-demand services — ‘competitive separation’ is a challenge that many publishers face.

Yet for both publishers and advertisers, there are automated controls that can be deployed to prevent your message from being spoiled by frequency or competition issues.

Quality control

For the delivery of online video ads, quality has many variables from the audience to placement and load time to viewability. Controls must be in place to manage this array of factors.

Competitive separation — giving media owners the ability to separate creatives whether the campaigns are executed traditionally, programmatically, or from third-party tags — is one such control issue with which many have trouble getting their heads around. As OTT video audiences have grown, so has the chance of ad fatigue for many publishers. Competitive separation helps solve this issue by allowing publishers with long-form content to fulfil an ad break with creatives from various sources and de-duplicate categories or advertisers (landing page URL) across sources.

For instance, a publisher could ensure that if the first ad is a Coca-Cola ad from a direct-sold demand source, subsequent ads in the pod would not be from competing brands — regardless of the source. Competitive separation controls, the likes of which are available in the SpotX ad serving platform, give audiences a relevant and diverse set of ads each time, preventing the ad experience from being spoiled by excessive repetition.

Using podding to control frequency and placement

Engaged in a TV-like viewing experience and watching their choice of premium highly engaging content, OTT audiences are highly valuable to advertisers.

Without programmatic controls, however, ads delivered in this environment are placed randomly, rather than in a controlled and optimised fashion. With the aid of podding technology, publishers can fill an ad pod with multiple ads from a single ad request. They can be programmed to play in a particular sequence, as the diagram below shows.

From a publisher’s perspective, podding maximises efficiency and fill, offers more control and is a better experience for the audience. The system eliminates duplication by using a single ad call to fill multiple ad slots, rather than individual requests for each ad within the pod.

Not only does this erase the possibility of ads repeating or running next to competitors’ ads, it also means fewer ad calls between various platforms, easing latency and infrastructure loads. Pods can also be configured to maximise ad revenue – for example, a 90-second pod could be programmed to ad call lengths of 15-second, 45-second, 15-second and 15-second.

From the advertiser’s perspective, podding delivers more control and greater effectiveness by facilitating de-duplication and competitive separation. Coupled with the use of standard identifiers, SpotX enables advertisers to control frequency across all environments, even those without advertising identifiers like some smart TVs.

Ask your technology partner the right questions

Simply calling three ads at once is nice, but it doesn’t really resolve the issues mentioned above. At a minimum, to truly reap the benefits of podding, your technology partner should be able to provide the following features:

Tight controls over ad delivery, such as:

– Maximum pod duration
– Maximum duration per individual ad
– Minimum duration per individual ad
– Maximum number of ads

Tight controls over ad content, such as:

– Automatic ad deduplication
– Competitive separation

read more here: www.thedrum.com

65% of Digital Media to be Traded Programmatically Next Year

Programmatic ad spend will have grown by 24 percent over the course of this year, and will grow a further 19 percent next year, according to Zenith’s Programmatic Marketing Forecasts published today. This will mean that in 2019, 65 percent of all digital media will be traded programmatically. But while the growth of programmatic trading continues to be strong, Zenith says it’s slightly slower than expected, due to a mixture of new data laws and investment patterns within the industry.

Zenith says growth is being driven by the fact that the breadth of formats which can be traded programmatically is improving all the time, specifically with mobile video and audio formats increasingly available programmatically.

The company believes that very soon there will be very little which cannot be traded programmatically, and from there is it simply a question of how quickly each country embraces total automation. Zenith predicts that by 2020, 99 percent of digital media will be traded programmatically in Canada.

“We expect all markets to follow Canada and use programmatic trading for all digital media transactions eventually,” said Zenith’s report. “Indeed, it’s only a matter of time before programmatic trading becomes the default method of trading for all media.”

For the moment, adoption of programmatic trading is highest in the US, where Zenith says 83 percent of all digital media will have been traded programmatically this year. Given the scale of the US’s total digital ad spend, this means nearly half of all programmatically traded ad dollars will have been spent in the US ($40.6 billion out of a global total of $84 billion).

Canada comes in second, with 82 percent of digital media traded programmatically. In Europe, the UK and Denmark lead the way, with 78 percent and 75 percent of digital dollars spend programmatically in each country respectively.

Progress towards total adoption has been slightly slower this year than expected, which Zenith attributed to a couple of factors. One was the introduction of the EU’s general data protection regulation (GDPR) which restricted the data available for programmatic transactions, making it simultaneously more expensive and less attractive.

But Zenith thinks the primary cause was that advertisers have been investing heavily in making programmatic trading more effective, at the expense of ramping up the scale of programmatic buying as quickly as they might otherwise have done.

read more here: videoadnews.com

YouTube To Introduce ‘Ad Pods’ That Stack 2 Commercials Together

YouTube is adding a new advertising solution to its portfolio, one that makes the streaming video platform more like traditional TV offerings.

The Google-owned video site will be testing what are calling “ad pods.” The ad pods will see two video ads stacked back to back. Until now, YouTube ad breaks only featured one ad at a time. Importantly, users will still have the ability to skip the ads and go straight to the content.

YouTube will roll out the ad pods on desktop later this year, with mobile and connected TV screens to follow.

According to a blog post from Google video ads project manager Khushbu Rathi, the goal is to reduce the number of ad breaks during longer viewing sessions.

“Through this research, we also learned that fewer interruptions is correlated with better user metrics, including less abandonment of content and higher rates of ad viewing,” Rathi writes.

“Why does this solution make sense? Because when users see two ads in a break, they’re less likely to be interrupted by ads later. In fact, those users will experience up to 40% fewer interruptions by ads in the session,” he adds.

The company cites experiments suggesting the ad pods resulted in a mid-to-high single-digit increase in reach and frequency for advertisers, without impacting brand lift.

The move is somewhat surprising, given that Google has been at the forefront when it comes to encouraging shorter ads from marketers. The company launched its six-second bumper ads product more than two years ago. That format remains popular on the service.

read more here: www.mediapost.com

YouTube Tests Ad-Supported Movies

The streaming video platform YouTube quietly rolled out a new feature over the past few weeks: full-length, ad-supported movies.

The movies are part of an exclusive deal the company signed with MGM. Among those now streaming: “Terminator,” “Legally Blonde,” “The Pink Panther” films and “Rocky.”

The movies are available through YouTube Movies, which previously focused on movie rentals and purchases. They feature pre-roll advertising and a number of ad breaks. As of this writing, “Rocky” featured 10 interstitial ad breaks.

YouTube’s flexible advertising model could potentially enable other options, like allowing one advertiser to sponsor an entire film. As with YouTube’s other channels, the movies will be ad-free to subscribers of YouTube Premium.

What YouTube has going for it is its massive scale.

The company says it has 1.8 billion logged-in users per month and has become the de facto home for free video content online. Many consumers still associate YouTube with user-generated content, short-form video from creators, or music videos. The company is clearly trying to remedy that association.

In addition, classic movies are a safe, reliable place to advertise. Marketers know exactly what they are getting. With YouTube having faced a number of brand-safety controversies over the last year, adding brand-safe content to its portfolio is one solution to the problem.

Free, ad-supported movies may be fresh to YouTube, but they have become one of the staple features of Vudu, the streaming video service owned by Walmart. Vudu also has a deal with MGM, covering the same library of films. It also has other deals with other studios. It isn’t clear whether YouTube will pursue similar arrangements.

read more here: www.mediapost.com

Ad-Supported OTT Viewers Incremental To TV

Consumers that watch ad-supported streaming over-the-top video services are largely incremental to those that watch linear TV. They are a “high-value” audience. as well, per the IAB.

The IAB released its report, “Ad Receptivity and the Ad-Supported OTT Video Viewer,” at the first edition of its NewFronts West event, held in Los Angeles Tuesday.

The IAB sought to explore who watches OTT video and determine some of the defining characteristics the audience.

The report found that viewers of ad-supported OTT services (i.e. YouTube, Crackle, Roku Channel) do not typically watch linear TV. Over half are cord-cutters or cord-shavers. In other words, they make up a largely incremental audience to linear TV.

The IAB also found that even though the primary audience for ad-supported OTT services are the “typical ad blocking demo,” skewing younger and male, they are not opposed to ads delivered through these services.

“ASV OTT viewers are more receptive to advertising than either SVOD OTT or TV Only viewers,” the report says. “Many report they enjoy interacting with ads. In fact, ASV OTT viewers think of ads on this platform as being better.”

All told, 73% of adults surveyed that watch OTT video also say they watch ad-supported OTT video, with 43% saying they watch ad-supported services the most out of their streaming options.

That suggests that while ad-free options like Netflix and Hulu remain powerful forces in the industry, there is still opportunity for ad-supported options.

The full IAB report can be found here.

Connected TV: The challenges and opportunities for marketers

“The Situation is so much cooler now that he’s off drugs and lasagna is his vice instead” is an actual thing that I said out loud last week. We all have our guilty pleasures and yes, Jersey Shore is one of mine. MTV recently rebooted the show after six years, during which the proliferation of connected TV changed the television landscape dramatically. Back in 2009, I watched the original series on MTV; the new episodes, on the network’s Roku app. I don’t even know which night of the week they originally air.

I’m not alone. eMarketer estimates that about 182 million Americans watch connected TV, a term that encompasses smart TVs, over-the-top (OTT) devices like Roku and Amazon Fire TV, subscription services like Hulu, and even gaming consoles. And yet, according to a survey of ANA marketers, only 15% have connected TV in their media plan.

“It’s easy to say, ‘You should be on connected TV,’ but that’s such a broad term,” says Will Felcon, Head of Product & Technology at OTT advertising company Premion. “There’s a lot of confusion in this industry and the fragmentation isn’t helping the lack of understanding.”

Fragmentation: A challenge and opportunity in connected TV

Let’s use Jersey Shore: Family Vacation to illustrate the fragmentation. You can watch the show on MTV and its various apps. Episodes are also available on Amazon Prime Video, Google Play, YouTube, iTunes and Vudu. That totals 14 different channels, discounting pirated content.

Tim Sims, Senior Vice President of Inventory Partnerships at The Trade Desk, points out that the fragmentation is both a challenge and an opportunity. While people are watching content from every which way, that also gives marketers a chance to capitalize on one of connected TV’s main advantages: more sophisticated targeting capabilities.

“For the history of TV buying, we’ve been mostly stuck in a world where the transactional currency is age and gender,” says Sims. “One of the big potential tipping points is, you take all the amazing things you can do in digital, like audience targeting, and apply them to TV, which was impossible before.”

Compared with linear TV, connected TV also lends itself to more sophisticated frequency capping and relevant retargeting. Data providers also enable more effective reporting and measuring, telling advertisers where and how many times, and on which devices, an ad was viewed.

An omnichannel look at TV

There’s a parallel between connected TV and ecommerce: perpetually on the rise and particularly popular with younger consumers. Roku’s ad revenue is projected to hit $293 million this year, making the company second only to Hulu in OTT ad sales. According to Nielsen figures, Roku ads have 10.2% greater incremental reach over linear TV among 18- to 34-year-olds.

However, much like in-store shopping, linear still dominates. Traditional TV ad spend may be down year-over-year, but eMarketer still projects it to reach nearly $70 billion in 2018.

“The number of cord cutters continues to grow, but there’s a larger group of people who have linear TV and Amazon Fire or Roku or a smart TV with Hulu and all these apps preloaded,” says Sims. “That’s quite a substantial middle of the curve. We’re still in the early days for what the opportunity is, which is exciting.”

Looking forward

Connected TV is the fastest-growing video segment. And just as marketers are buying more ads there, they’re getting savvier about it.

read more here: clickz.com

Google is advertising in print magazines and you can’t tell

Perhaps you would buy a smartphone for its camera if you knew it was used to photograph the rapper Cardi B on the cover of W magazine. Or actress Angela Bassett on the cover of Allure. Or Ryan Gosling on the cover of GQ.

If so, you might prefer to know that the company pushing this phone—Google in this case—paid for this partnership, and that the magazine, owned by publisher Conde Nast, made a business decision rather than expressing an aesthetic or technological preference. You may want to know photographers didn’t necessarily decide that this was the ideal device.

Regardless of your personal preferences, federal advertising guidelines in the US certainly require such disclosures. In advertising, “the watchword is transparency,” according to the Federal Trade Commission. Consumers need to know when they are looking at paid promotional materials.

Yet Google’s new approach to promoting its Pixel phone’s photographic prowess presents a very murky picture that may not meet these standards. The tech company has partnered with Conde Nast publishing and celebrities to create advertisements that don’t seem like ads at all. The publisher is using the Pixel phone in magazines like Vogue, GQ, Allure, and Glamour, by photographing stars like Bassett and Ryan Gosling with the phone’s camera.

You might not even know about it. But you might learn in other ways, such as through a mention on social media.

here’s certainly nothing wrong with a partnership between Google and Condé Nast, which the publisher’s chief creative officer, Raul Martinez, described in a press release last month: “Photographing our covers with the Pixel 3 was a compelling challenge, impressing even our most discerning photographers. This strategic partnership with Google is an example of how we’re innovating to bring our audiences content that is created and distributed in new ways that reflect the cutting edge of the industry.”

What is a material connection?
“If there is a material connection between your company and an endorser, disclose it,” the FTC explains on its website. A material connection, according to the FTC’s Endorsement Guides, is a relationship between the endorser and the seller that “might materially affect the weight or credibility a consumer gives the endorsement.”

The government body states that its guides “reflect the basic truth-in-advertising principle that endorsements must be honest and not misleading.” As such, if the endorser has been paid or given something of value to tout the product, disclosure is a must because “knowing about the connection is important information for anyone evaluating the endorsement.”

read more here: qz.com

The 30-Second Ad Makes a Comeback, Now 55% of All Video Ad Views

In Q3 2017, the 30-second ad was an endangered species. It made up just 27 percent of all video ad views as marketers attempted to cram their messages and branding into shorter ads that viewers would tolerate. That quarter, 67 percent of video ads were 15-seconds long.

What a difference a year makes. Now, people do most of their video streaming on their living room TV, and that’s a win-win-win for all parties. Viewers get true lean back viewing, publishers get a receptive audience, and marketers get high completion rates and lots of unskippable inventory.

In Q3 2018, 55 percent of all video ad views were 30-seconds long, 41 percent were 15-seconds long, and 2 percent were 6-seconds long.

This data comes from the Q3 2018 Video Advertising Benchmarks report released by cross-platform advertising solutions specialist Extreme Reach. Its data comes from major brand advertising served by Extreme Reach.

“The CTV opportunity is one that advertisers are increasingly leveraging, and the impact that’s having on ad length, while unexpected, makes complete sense,” said Mary Vestewig, senior director of video account management at Extreme Reach. “I expect we’ll see even more exciting changes driven by CTV as consumer adoption grows and technology for targeting and measurement evolve.”

Not that everything is good news for the 30-second ad: The report finds click-through rates for 15-second ads were much higher (although rates for both lengths were lower than last quarter): The CTR for 15-seconds ads is 0.30 percent, while the CTR for 30-second ads is 0.14 percent.

read more here: onlinevideo.net