Good News For Online Video

Good News For Online Video: Standard Metric May Be In Sight!
by Randy Kilgore

Did you see the joint research published by the ANA and Forrester this year? Sixty-two percent of respondents think TV ads have become less effective in the past two years. What’s the market’s reaction? Lots of talk about seismic change and then, drum roll please, more money is spent on TV. Man, those guys on the broadcast side have it good.

We’re not TV bashers here. Yet we believe zealously in online video and think more advertisers should be including it and/or increasing it in their media mix, because we have the data and insights to show it works for a number of marketer objectives particularly as a complement to TV: in creating awareness, driving engagement, lifting brand metrics, and, yes, even in driving traffic. Yet, by all statistical measures online video ad spending lags far behind consumer migration to online video. Why?

At a recent Interactive Advertising Bureau board meeting, two very well-respected agency executives were asked what the No. 1 barrier to growth was for online advertising. The answer was “measurement.”

On my way home from the meeting I read Michael Zimbalist’s call to “Measure the web as you would TV…” It’s an excellent review of our current measurement predicament and unlike so many industry opinion pieces that simply bemoan the current status, Zimbalist, vice president of research and development operations for The New York Times, provides a blueprint. He even proposes a name: WRPs (like GRPs, get it?).

The only shortcoming in Zimbalist’s blueprint was that when he proposed several standard units that could be measured as a WRP, he forgot to include pre-roll. Good news, though. In a follow-up conversation, he agreed that pre-roll would be an excellent addition. “Online video ads, whether pre-, mid- or post-roll, are natural candidates to be measured in WRPs,” he said.

We fully support the idea of creating an industry recognized measurement unit such as the “WRP.” We ask others to support this as well — and we call on the IAB, the AAAA’s, and the ANA to endorse the idea and formalize a process for pursuing this goal.

In fact, we did call the IAB to find out if they support this idea. Good news again, they do! “Of course the IAB supports this,” says Randall Rothenberg, CEO and president. “In fact, our Measurement Standardization Initiative is IAB’s highest priority this year, and will remain so until marketers, agencies, and media have a simpler, standardized set of ‘currencies’ that allow brand advertising to be bought, sold, measured, and optimized online. The 4A’s and ANA have agreed to help lead a task force with us to drive measurement simplification, so we think — finally — the cross-industry momentum exists to get this done.”

How would it work? As Zimbalist proposes, the basis of calculation of a WRP would be the same as a GRP: reach and frequency, with an agreed-to definition of exposure or impression depending on the ad format. For example, in order for a pre-roll impression to qualify, the user would have to demonstrate some level of engagement with the ad (for example, a minimum of five seconds exposure).

TV buyers would find it much easier to buy WRPs than impressions since the metric more closely mirrors the way they buy TV using GRPs. Traditional planners could allocate money more easily across platforms knowing an industry-recognized standard was the unit of measurement.

Everyone in this industry talks about how the share of overall media consumption spent with online video doesn’t match the advertiser spend. By creating an industry-recognized WRP unit of measurement, we will finally find out if the reason was artificial (lack of measurement) or has some other root cause.

The Decline of the Companion Banner

by Shane Steele

In my last post “CES 2010: What it Means for Video Advertising,” I shared a few predictions for the online video ad industry. Among them was that the “companion banner” (i.e. the banner ad that appears adjacent to an in-stream video ad), will eventually fade away as the industry evolves towards more optimal formats for online video advertising.

This is not to say that companion banners don’t have a perceived value. From the advertiser’s perspective, companion banners provide the benefit of complementing in-stream ads with an opportunity for persistent branding, messaging, and user interaction during program viewing. However, there are a number of factors that together are causing the industry to move away from companion banners as a standard for in-stream advertising:

1- The companion banner is now an unnecessary vestige of early Web video

In the early days of online video, companion banners were introduced by publishers as a way to track video impressions. Since tracking pixels couldn’t be added to video itself, publishers added a companion banner which could be tracked as a proxy for video impressions. With advances in Flash technology, a tracking pixel can now be fired from within the video environment so there’s no longer a need for the companion banner for tracking purposes.

2- The companion banner is not a significant driver of CTR

Companion banners were also originally introduced as a way to drive clicks with online video. But if you look at the stats, companion banners aren’t a significant driver of CTR. Based on data from the thousands of campaigns we’ve run at Tremor Media, the companion banner typically contributes a small percentage of click thrus for a pre-roll video ad. To make matters worse, there’s often confusion over CTR (and eCPM) calculations given the lack of consistency with how companion banner impressions are factored into these numbers.

3- Full screen experiences don‘t lend themselves to a companion banner ad

As broadband penetration and speed increases, publishers can deliver richer viewing experiences such as larger player sizes and expanded players that can support full screen viewing which squeezes out the real estate used by the companion banner. Hulu, MLB.com, CBS.com and Yahoo are some notable examples of sites that have moved away from standard companion banners.

4- Companion banners are a hurdle for standardization and “TV Everywhere”

Advertisers rely on ad networks and publisher syndication networks to achieve scale for their ad campaigns, which means delivering ads across many sites for any given campaign. Video ad serving platforms and ad networks have built tools to manage the complexity of dealing with different player sizes and formats to ensure the right ad format and size is delivered correctly to each site. However, companion banner acceptance is still an issue for some, and a potential hurdle for fluid cross platform advertising, such as the push for “TV Everywhere”.

Since my last post, several agency and advertising colleagues have asked for a point of view on how this trend will impact them. So here goes:

· Media Planning: Online video plans should not have a requirement of 1:1 correlation between in-stream impressions and companion banner impressions, especially on the most premium sites and content. Furthermore, advertisers and their agencies should take advantage of new interactive formats that can bring the functionality of the companion banner (and more) into the player environment such as data feeds and live polls (see examples here).

· Media Analytics: It’s been said over and over, but still worth repeating: there’s way too much focus on click thru rate. The metrics that matter are engagement and impact – both attitudinal and behavioral – which can be measured through a number of research providers. Companies such as Dynamic Logic and Dimestore no longer require a companion banner to track and survey users exposed to campaigns for branding measurement. If you’re wondering about ad effectiveness of the video vs. flash companion banner, there are several research sources (such as Dynamic Logic) that across the board show video is more effective than display in terms of brand lift.

*Source: Dynamic Logic MarketNorms data through Q309

· Creative: Creative teams should position for the change by leveraging formats that support interactivity and engagement within the player environment. These advanced in-stream formats allow creatives to push the boundaries of online video campaigns beyond repurposed TV spots to create non-linear narratives and interactive experiences that engage the viewer inside the player. Instead of video-centric micro sites, think about creating Web site-like video ads. And if you’re still going to use a companion banner, take advantage of interactive elements to allow for engagement, not just click thru.

While companion banners still dominate video publisher sites, over the next few years, wide spread adoption of larger and full screen video environments, and more interactive in-stream formats will be the driving force in the eventual death of the companion banner. My company estimates that about 95% of all pre-roll ads currently are served with a companion banner, but this number is predicted to come down to about 80% before the end of 2010, particularly among premium publishers. The companion banner may not be dead yet, but in a world of full screen viewing experiences and premium content, the overlay will become the new companion banner. What do you think?

CES 2010: What it Means for Video Advertising

by Shane Steele

Every year, it seems that almost everyone who works in technology or media descends on Las Vegas to attend the Consumer Electronics Show. It has become the largest trade show in the US according to some estimates and as somebody who’s just back from Las Vegas, I can believe it. It took me and my team about two days to walk the halls, and thank goodness we all had comfortable shoes on.

The 3D TV displays clearly dominated the show. We couldn’t walk more than a few feet before seeing another device manufacturer or content producer showcasing their new 3D wares and eyewear. But we are media & advertising people, and a few other things interested us more than 3D TVs. Mukund Ramachandran, head of Tremor Media Product Marketing and I took notes, and below is our summary of the trends that we see impacting the online video industry as a whole.

It’s an App World

Everywhere we looked, we saw apps – app supported phones, tablets, TVs, and even cars. It seems like there isn’t a device that won’t support apps in the near future; or at least that’s what the device and software makers are betting on. Today, the app ecosystem develops largely for the phone meaning for predominantly casual gaming and location based apps. As apps migrate to larger screens, we will see more compelling media, content, and entertainment apps which support richer ad experiences within the apps themselves.

Touch Everywhere

Devices that use touch as the primary mode of interface continues to grow – from phones, to digital book readers and tablets. This trend will have a huge impact on how UI designers think about content delivery within the touch context, where users are far less likely to take multiple actions to get to their desired content. Simple intuitive design, and the shortest path to presenting content, will become paramount. From an ad perspective, we think this is going to further increase the adoption of in-stream ad formats.

Connected TV’s

3D TVs are cool, but Wi-Fi enabled connected TV is cooler. This is the technology that will finally tip consumer behavior towards watching more online content on their TV. As more TVs and TV-connected devices become Wi-Fi enabled, online video will change fundamentally. It will no longer be “online video”; it will just be video that can move from screen to screen.

What does all of this mean for online video advertising? How will online video advertising evolve over time? Yogi Berra once famously said that predicting anything is hard, especially if it’s about the future. But we’ll give it a try – here are ours:

• Online video advertising will become video advertising. Our industry will change fundamentally. Today, most users go online for a few hours a day but we see a future in which they will be online almost all the time – via their PC’s, tablets, e-Readers, TV’s and phones. The whole distinction of “being online” will go away. Hence, online video advertising will evolve to digitally-delivered video advertising with the ability to reach audiences wherever they are consuming video, across any platform, and on any screen.
• Ad networks with a technology edge will win. As content gets delivered across multiple devices and platforms, advertisers will insist on getting an audience view vs. a device specific view for their buy. Ads will have to be trafficked, delivered and optimized across multiple platforms – and the ad networks that have a technology advantage that can migrate across platforms will win.
• Video reporting will evolve. Click thru rates and completion rates will give way to brand awareness and engagement metrics. Online video providers will scramble to work with third party research providers who measure branding impact and ROI to demonstrate the value they have created.
• The companion banner will eventually fade away. Companion banners were initially introduced as a way for publishers to track video impressions, because it was then not possible to introduce tracking pixels on videos. In order for the publisher to track video plays, publishers added a companion banner along with every video impression and said “we’d track these” as a proxy. Not only is that no longer necessary from a tracking perspective, but the “TV everywhere” phenomena will lead to more full screen experiences, contributing to the death of the companion banner.

Online video advertising is predicted to boom in the next few years, and the technology advances seen at CES will only contribute to this trend. A final prediction: As consumers adopt new internet and app enable devices for video consumption, digital video ad creative will finally move beyond repurposed TV spots. And we’ll see lots more three second spots than 3D spots.