Calling 2013 a big inflection point for the space, Xaxis VP of Product Development Christina Beaumier proclaimed: “TV advertisers no longer think of digital video as a red-headed stepchild.”
At VideoNuze’s Online Video Advertising Summit, participant after participant illustrated why these are digital video’s halcyon days – in particular, because of the increasingly complementary nature of advertisers’ TV and digital video strategies.
That shift has been driven by tools providing universal measurement across platforms, namely Nielsen’s OCR and comScore’s VCE. Not a moment too soon either, as constant consumer consumption across devices makes it harder for broadcast advertisers to reach their target audience solely through TV. Advertisers ability to extend reach beyond the TV set is further by taking advantage of digital’s targeting abilities (ahem, cookies).
However, layering in too many levels of data will make the targeting pool too small – digital media planners and buyers are tasked with employing the right tools for various objectives.
Just because we have all these tools doesn’t mean we need to use them all,” Beaumier said. “We need to help clients pick and choose best options.”
In addition, TV budgets are flat while digital video spend is on the rise. GroupM Director of Emerging Communications Michael Bologna labeled it the “great scam”: TV ratings are going down but advertising rates are going up. Sure, TV is still getting the lion’s share of ad spend, but advertisers realize they’re getting less for their money and the opportunities in the digital space continue to mount.
For example, a panel on the recent newfronts corroborated my recent experience: this is quality content on-demand, regardless of device. Over-the-top devices like game consoles are no longer seen as the province of young male gamers (Xbox will be demonstrating this at our upcoming OPS TV event). Advertisers have also realized that consumers use more than just Netflix on their connected TVs – music and sports apps are proving quite popular.
But don’t think the day was all pom-poms and rah-rah: challenges are heavy, with some leaning toward insurmountable. While OCR and VCE have certainly been game changers, there’s still a big measurement gap: melding data sets –first- and third-party cookies with OCR/VCE – is still a work in progress. In addition, de-duping digital and TV audiences is proving to be quite the struggle.
As Videology VP of Vertical Product and Data Solutions Alek Schleider put it, “Reach is very important, but the right reach is even more important.”
Schleider also noted that the big race to OCR guaranteed buys has some giant hurdles in the form of unrealistic demands and limited inventory.
The biggest challenge seems to be that video impressions are verified after the fact. Nielsen has seriously cut the turnaround time on ratings processing, but OCR employs Facebook to sends back a percentage of the audience hit post-campaign. Publishers therefore are forced to over-deliver to ensure they hit their targets, which can bump up CPMs stratospherically.
Video buys don’t always have to be guaranteed, Beaumier mentioned: if you put OCR tags on direct or programmatic campaigns only to use as a verification tool, you may find surprising results. In addition, this data can be used optimize toward placements that are hitting the demo and away from the misses.
As we found during our panel at OPS markets, the programmatic video space – with its inherent targeting opportunities – is nascent, but fast-growing. Jeremy Ostermiller, CEO and Founder of Altitude Digital, said demand needs to catch up with supply. While big pubs are often sold out via direct sales, high-traffic midtail sites with small direct sales teams are counting on exchanges and networks to provide a majority of the fill. A 50% fill rate now is good, but we’re a few years away from 80%-90%, he said.
During a break, a friend suggested that the infrastructure for true video RTB is still coming – he suggested fourth quarter this year will be a very different story in terms of targeting capabilities. Also, preferred programmatic selling tools like private marketplaces require a lot of manual labor while not delivering a lot of scale. But as we’ve seen on the display side, experience is likely to make the process flow more smoothly.
Finally, Digitas SVP of Media Adam Schlacter suggested the construction of campaign creative needs to be far more diverse – distinctive allocations should be built for each screen to maximize cross-platform reach. But of course, showing the empirical value of such a creative expansion will prove difficult.
Overall, the Online Video Advertising Summit provided a great forum for conversation, and I must thank Editor and Publisher Will Richmond for setting up a great agenda. The issues to raise with our OPS TV participants has significantly multiplied.