What are the biggest opportunities and challenges facing online video? 

Ad spend on online video is growing faster than any other digital category. In fact, a report released by ZenithOptimedia projected that the category will grow by 29% each year through 2017. A study by eMarketer puts the total annual spend at $12.82 billion dollars by 2018.

How to make the most of this trend has been a hot topic at advertising events around the world. We recently attended the VideoNuze Video Advertising Summit in New York City and the Cannes Lions International Festival of Creativity to dive deeper into how online video is evolving and disrupting the digital market. Here are a few trends we noticed.

Emergence of “vertical video.”

Film, TV, and video have long been shot in a horizontal or landscape view, but the rise of mobile has started to challenge the assumption that video should always be presented in this format. Consumers are spending less and less time on traditional TV and desktops, and more time on mobile, as Scott Ferber of Videology pointed out with following graph during the VideoNuze summit:

 

TimeSpentOnScreensSince more and more people are consuming video on smaller screens, experts on the VideoNuze summit’s mobile video panel argued that it was an unnatural behavior to have to flip a phone sideways in order to view it full-screen in the traditional landscape view. Instead, content creators and advertisers should start thinking seriously about presenting video vertically.

This sentiment was echoed by Evan Spiegel, founder of SnapChat, during the Cannes Lions festival where the company released its 3V advertising service (short for Vertical Video Views) specializing in the non-landscape format. With these advancements, we wouldn’t be surprised if both publishers and advertisers start flocking to this format (or at least experimenting with it) in the coming months.

Real growth opportunities in programmatic.

At the VideoNuze summit, Altitude Digital’s CTO Manny Puentes was on a panel entitled “Programmatic Advertising from the Publishers’ Side,” where he argued that programmatic will lead to more efficiencies for publishers. Though things may look complex on the operational side now, improved tools will bring more efficiencies and give control back to publishers. “In three years, people won’t even say ‘programmatic,’” said fellow panelist Doug Fleming, Director of Programmatic at Hulu. “It’s just an holistic ad sales strategy.”

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CTO Manny Puentes was recently on a panel discussing the potential of programmatic for publishers.

In Cannes, the technology behind the advertising has become just as important as the advertising itself, and programmatic continues to be a big piece of the puzzle. Even the New York Times has taken notice, detailing the shift in attention in a recent article.

Marketers agree. “[Programmatic] made us smarter and more effective,” said Ron Amran, Heineken’s senior media director at a TubeMogul event at Cannes. “We had more data to put back into the Heineken USA engine.”

Viewability… still not going away, but still noise.

The buy-side panelists at VideoNuze continued to be up in arms about video viewability standards, with speakers like Dan Kern, SVP at MediaVest, arguing that he shouldn’t have to pay for any impression that was not viewable. Other panelists argued that we should redefine “ad impression” to mean only an ad served that was verified to be human and viewable.

Still, it was clear there were still too-big-to-ignore discrepancies across different verification providers, which each use a different methodology to determine viewability. Giving the right tools to publishers to understand their viewability and serve more viewable units will get the industry closer to putting this issue to rest once and for all.

That advancement will only continue to drive the growth of programmatic video. At the Automated Advertising Panel in Cannes, Adam Shlachter, Chief Investment Officer at agency DigitasLBi, called viewability and fraud the “noise” in the programmatic space, and said that once the industry overcomes those issues, media planning will be easier and programmatic budgets will grow exponentially.

The future is fluid

As with more advances in the digital industry, investment in these areas will likely funnel first to the buy side of the business. But publishers also need to be equipped with the the right technology and innovative tools to compete in this dynamic marketplace. Big Data platforms (like ARENA 2.0) will be an essential part of helping publishers better understand how and where their audiences are engaging with online video and stay on top of the ever-evolving trends.


lgalloway_220x220By Lindsey Galloway
Director, Product Communications

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