Another year is just about to bow out and I've already been looking to the future in a variety of ways including what's going to happen in video advertising. So can 2014 possibly hold up to the growth video advertising saw in 2013? Can it maintain its steady yearly grab of revenue percentage from older, more traditional advertising methods? More importantly, can it finally find a way to draw those all important ad dollars away from TV, or at least get tied into those ad dollars?
Programmatic Buying Key Factors
If you read my recent article about programmatic ad buying then you already have a feel for what kind of power that has in the industry and the potential for the future. With video advertising practically bursting at the seams, programmatic buying is going to be the holy grail for ad networks to draw in big money. This is going to also help set in motion several other things as well.
Oren Harnevo, CEO of Eyeview, had this to say on 2014 video advertising, "As digital buying becomes more programmatic, brands can take more of an active role in the media buying process. Why? Programmatic buying simplifies the entire process, making it more analytical, scalable and actionable for brand marketers. At the very least, we can expect brands to select vendors who provide transparency around media buys."
Transparency is going to be vital to the success and expansion of programmatic buying. The buyer needs to know where their ads will be and against what content in order to input the necessary information for the programmatic buy. Without that they can't make an informed decision on what sites they want to place ads on or what publishers they want to work with.
This is, in my eyes, the largest driving factor of continued video advertising for the upcoming year. Without proper programmatic buying advertisers might get tired of blind ad placements in hopes of hitting their target audience. They are going to need to start seeing a steady or rising ROI on all this digital video advertising, and soon.
Guaranteed Viewability for Video Ads - Opportunity to See
With expanded programmatic buying comes continued expansion of guaranteed viewability for video ads. The IAB has set forth a compliance program, and the "opportunity to see" and viewability of video ads is going to become the major basis of video ad metrics. The IAB Quality Assurance guidelines will help drive the better transparency in the video advertising industry and will be required for programmatic buying to become everything it can be. The flow of information on ad placements will turn into a torrent and that will allow ad buyers to make the best placements possible via more powerful algorithms and artificial intelligence. This could also lead to a tiered pricing system where "premium" placements mean premium prices based on "opportunity to see," and viewability
Mobile Ready for Video Advertising Expansion
The Mobile market is growing by leaps and bounds in regards to ad revenue and it's a prime target for large scale video advertising expansion thanks to larger smartphone screens, faster mobile data networks and new technologies and offerings from mobile ad networks. Tablets and smartphones are the most popular platforms with Millennials right now and that means there's a lot of targeting that can be done there. Additionally, mobile game players are receptive to video advertising, provided you are giving them something in return - usually in the form of virtual currency. All of that combined with new, better mobile ad formats makes me believe that the continued growth in mobile advertising will expand to mobile video advertising and together they will continue to chip away at the overall revenue percentages of more traditional digital advertising like search, display and lead generation.
This chart is growth of total revenue percentage for the first half of 2013. Notice that video and mobile are the only two that are growing, and mobile is growing massively. That change from around 9% to 15% was just in the first half of the year. It's entirely possible that mobile could see 25-30% of all digital ad revenue by the end of 2014. A lot of that is going to be mobile video ads.
With desktop PC sales faltering, and mobile device sales climbing, is it any wonder that money is shifting away from traditional display and search and moving into mobile?
Screen Convergence Means TV (Ads) Everywhere
Screen convergence has arrived, for the most part. TVs are no longer the only place to view TV content, and many of them are connected to the Internet for access to sites like YouTube, Hulu, Netflix and Amazon (along with a plethora of non-video entertainment sites). Major cable and satellite companies are turning into MVPDs, multi-channel video programming distributors, meaning they are now not just distributing through the old TV or cable method but also streaming video through IP networks.
This is an important step in their evolution or they will be left behind. 2014 could be the year when the virtual MSOs spring up and dominate the landscape. If that happens it could spell disaster for the old cable companies who didn't adapt fast enough as they start seeing a massive exodus of subscribers to these new providers. That also means that no longer will TV ads be limited to the TV.
With DVR and VOD, TV advertisers have been growing more concerned over whether or not anyone is seeing their ads. Several initiatives have begun to take shape to combat this including sliding ads into VOD that cannot be fast-forwarded. But that's just the tip of what's going to happen. With a virtual pay-TV provider, all ads are both TV and Internet at the same time. They are playing against TV content but are streaming to the viewer. That means that 3 days after the original air date, when ratings tracking is ended, those ads could be swapped out for new ads, either from the same advertiser or from a different advertiser altogether. This could give added value to those a placements as any time in the future that the content is viewed, it has the most up-to-date offers and information in the ads. This will probably all happen through VSUITE which combines Internet video ad protocols like VAST, VPAID and VMAP which will "enable content providers to deploy dynamic ad insertion to replace “TV” ads with digital ads on the fly, using a combination of linear TV (SCTE) and digital (VSUITE) standards."
TV-like metrics will continue to adapt to the new landscape as has already begun with iGRP - Internet Gross Rating Point. Offerings from comScore who has their vCE MP, validated Campaign Essentials Multi-Platform, and Nielsen'd XCR, Cross-Platform Campaign Rating are updated to include multiple format ad tracking. Even Google is working on their own Active GRP, "With Active GRP, marketers can now apply and compare that same metric to their display advertising campaigns."
All of these tools will make Internet video ad buying more like TV ad buying and with that comes TV ad dollars as buyers are better able to compare the two placements, which will really just be two facets of the same ad placement in the near future and determine where the best impact and ROI are happening.
New Ad Formats Create "Lean In" Experience
Engagement has long been a metric of video ads, but it generally just includes how much of a video ad a viewer watched. The new engagement metrics will go far beyond that as new video ad formats emerge that draw the viewer into the experience, creating a "lean in" experience instead of a "tune out" experience. Ads will become more interactive and more compelling, give the viewer more reason to pay attention and interact with the ad. With so many other screens at hand and things to do, multi-tasking has a seriously negative impact on brand and ad recall, what better way to keep viewers engaged than to make the ads interesting, fun and rewarding? For decades advertisers have held to the fact that ads are necessary in order for the content to be made and distributed. But Netflix, Amazon and even Hulu are showing that, that might not actually be so true these days. Netflix shows no ads and yet is creating an ever-growing library of high-quality, compelling, original content that has never seen the pixels of TV. They have effectively circumvented the entire traditional form of video entertainment and showed that ads aren't even needed to sustain such content. If video ads and ads in general don't become more interesting and perhaps even turn more into content than advertising, they might simply go unnoticed as the next generation grows up and skips over pay-TV (some are calling them 'cord-nevers') and goes straight online for all their TV.
The Future is Bright
2014 could see the culmination of all the things I have been tracking and talking about at ReelSEO for the past couple years. Screen convergence could be at a point where ad buying is no longer TV or Internet but instead simply a question of what platform you want to use to target a particular demographic. All video ad campaigns will be multi-platform and much of it could even be against the exact same content whether it is on TV, mobile or desktop PC. Connected devices in the market are growing so fast that there will be more of them than there are humans, everyone has multiple video-capable platforms and that means consumers can be targeted such that the campaign transmits the exact same message, in the exact same way, for the exact same experience everywhere, on every screen.
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