In no uncertain terms, 2014 is going to be the year of online video advertising. Advertisers and Marketers are flocking to online video to escape the ill-performing banner advertisement, and shrinking offline TV audiences, like never before. The overwhelming statistics generated from the recent DigiDay and AOL ‘State of the Industry’ report show that the advertising industry has finally embraced the power of online video, and will be investing in 2014. What does this mean for Web Publishers? Certainly, the pie is about to get a lot bigger. But, are publishers adequately primed to cut themselves a large enough portion?
It can be a daunting task for any publisher hoping to understand how to make the most profit from pre-roll advertising. With the ecosystem expanding and changing at such a rapid pace, it can appear impossible for a publisher to be sure they are getting the absolute best deal they they can in terms of monetization. Video is the key component of this.
So, what are the video advertising options available for publishers?
- DIY (Do-it-Yourself) - Selling Your Own Video Advertising
- Video Advertising Syndication
- Video Ad Networks
- Mix and Match
1) The ‘DIY’ Approach: Sell Your Own Video Advertising
In short, selling your own ad space. It means using engaging content to build a strong, quality audience, and managing the technical and financial systems involved in selling your own inventory. However, you receive 100% of the profits generated from the ad activity.
- You keep 100% of any ad revenue you generate.
- You keep total control over the content and ads served on your site.
- You can negotiate your own CPM with your advertisers.
- It’s a heavy time investment.
- You may miss out on big brand advertisers due to lack of access.
- You have to guarantee purchase intent of your audience.
- A video player.
- Video content.
- Access to advertisers.
- Technical ability to serve ads.
Who Might DIY Work For?
If you’re in a niche vertical and are concerned about serving your audience quality content, then you could consider this option, as it allows you to decide on the videos that will best resound with your audience, and then sell advertising space on the back of them. This strategy gives you the knowledge of what advertisers to target, and the ability to give those brands a certain guarantee of awareness and conversion. It can also be a profitable gig depending on how strong your content is, how your audience is engaging and how good your sales strategy is. As a general rule, the more niche your vertical is, the higher your CPM will be. Quality motoring sites, for example, typically enjoy a high CPM, with advertiser bidding driving up rates.
Say your motoring website gets approximately 2,000-3,000 impressions per day. You can make an educated assumption that visitors will be interested in products and information related to all things motoring. To engage your visitors and to attract more, you have invested in quality video content on test drives, launches, reviews, motorsport and motor shows. You have an educated idea of what brands should advertise on your site. You are in a position to set your own advertising prices and approach advertisers yourself.
Who Won’t DIY Work For?
This option may not work for publishers who don’t have the resources or time to develop their own quality content acquisition system or their own ad sales infrastructure. It also may not work for publishers who can’t guarantee the purchase intent of their audience. However, it does have significant perks for those who can manage to pull it off.
2) Sign Up for Video Advertising Syndication
In simple terms, you embed a ‘widget’ on your site and you are fed content and adverts suitable for your vertical. In some cases you can get content without being served ads. Usually you are signed up for a revenue share monetization model where you receive a small portion of the profits generated.
- Provides you with video content quickly.
- There’s no initial investment, so it’s not risky.
- Can help initially expand your audience.
- Little control over content or adverts served.
- Smaller share of the profits.
- No control over branding of player.
- A syndication network.
- Ad sales infrastructure.
Who Might Syndication Work For?
This option works well for websites that can’t guarantee the purchase intent of their audience. It’s the most dominant model on the marketplace at present because it’s the least risky and takes up fewer resources in implementing and maintaining. A good example of where it will work is a new website looking to establish themselves in let’s say, the celebrity vertical. You’ll need video content quickly and a monetization framework that you can plug straight in, without having to prove your worthiness by the amount of impressions you can deliver. An embedded widget will help build your audience quickly, and prepare you for other options down the line.
Who Won’t Syndication Work For?
Websites that have either a large number of impressions to serve, or who operate in a niche vertical, aren’t always best served by syndication. You have little control over the content and ads being served to your audience, and getting the best deal possible for your CPM can be tricky. Your audience won’t be getting content selected by you, and the likelihood is that the stream you’re receiving is being syndicated to hundreds, if not thousands of other publishers in your vertical, making it more difficult for you to differentiate your offering. In the long run, syndication will not maximize your profits, nor guarantee a quality audience with high purchase intent. Essentially you are handing over half of your slice of pie to the syndication network, and you’ll never own the content served.
3) Work with a Video Advertising Network
Ad Networks essentially match brand advertisers who want to advertise in your vertical with you and other relevant publishers. You can give the ad network either all or some of your ad space to sell, and they will sell at a CPM that is mutually agreed upon on (within reason). You maintain control over the video content you display, and can exhibit a greater amount of control over the ads you are served. This option requires some upfront investment in purchasing or producing your own video content. However, the return on that investment is delivered from a higher profit margin, as ad networks take a smaller percentage than syndicators for ads served.
- Full control over content on your website.
- Quality content.
- Quality audience.
- More profitable.
- Easy to implement.
- Control of branding and player.
- Upfront investment in content.
- Continual content refreshment.
- Initial set up with Ad Network or Video Solutions Platform.
- A video player.
- Video content.
- An Ad Network.
Who might it work for?
This option is suitable for websites who can serve a decent number of impressions, alongside some guarantee of purchase intent and audience relevance. It also works well for sites that have built a good audience volume through syndication, but now want to develop the quality of their audience further and want to increase their revenue potential through delivering more relevant video content.
This option can work alongside a website’s existing models, whether it be the ‘Do it Yourself’ approach, or the syndication model.
Who won’t it work for?
This option does require upfront investment, and may not work for publishers who can’t guarantee a certain number of impressions, or for those who have a low CPM to impressions ratio.
Conclusion: Don't Be Afraid To Mix And Match
While each of these options can act independently of each other, they are not mutually exclusive. Web Publishers, who know their website’s capabilities, can take the best bits from each of these options to find their own sweet spots. The good news is that many Ad networks act as a remnant inventory sales team. Essentially meaning that they only sell the ad space that you can’t – which can provide the perfect balance between the ‘Do It Yourself’ approach and using an Ad Network. Likewise, syndication and licensing content can be used in conjunction with each other. You can hold onto your syndication network whilst developing your own content acquisition and monetization engine.
Whatever option you choose, a capital investment around video is something to consider for your 2014 sales strategy. Investing in the ingredients to create your own content acquisition system can lead to your earning a much bigger slice of the advertising revenue pie. It’s also important to note that the more quality ingredients you use, the better the results you’ll get in terms of audience engagement. Having a quality site, with quality video content will reflect in your ranking, your click-thrus and, ultimately, the amount of profit you make.