Rich Astley, UK Managing Director at Videology, gives his end of year verdict on the online video market and video advertising.
What have been the most significant developments in online video in 2015?
We have seen four big trends in the last year:
- An industry-wide acknowledgement that Programmatic = Automation, and that’s theoretically a good thing for all of us looking to create more efficiency in the still very manual world of media planning, buying and selling. Video remains as the big hold out for programmatic adoption but we’ve seen bold moves this year by both sellers and buyers looking to transform their business over the next few years
- At the same time, a realisation that the brave new world of programmatic isn’t without its issues. This is the year that digital ad fraud was recognised and acknowledged as a major issue for video, and the push by the major players in the ecosystem to solve for it. We’ve also seen a broad push on quality standards across the board as measurement frameworks for viewability and engagement have become one step closer to more universal adoption
- Consolidation hit the industry in a big way in 2015 as we saw some business models and technologies fade, some accelerate into the limelight and a general trend of consolidated mar-tech stacks, increasingly built around walled gardens of first party consumer data. This has put pressure on point solutions and underlined the value of consumer connections where valuable data can be collected and leveraged to build products.
- Finally, the opportunities for the application of programmatic technologies to the traditional linear TV advertising world have now become a reality. Broadcasters such as Sky are embracing the opportunity for the future of both their consumers and their advertising clients by connecting data touchpoints across their platforms. We’re well positioned in the UK to be a leading market in Addressable Television with a healthy telecommunications infrastructure with good internet speeds, an innovative ad market and advanced set top box adoption and deployment.
How are brands approaching video differently to 12 months ago?
In a world of fragmentation caused by the emergence of multi-device TV and video consumption, convergence becomes the goal for marketers as they navigate how to build brands at scale, and with relevance. This means re-evaluating the way TV & video are planned as underlying panel based data sets cannot keep up with the rapid change in consumer behaviours. It also means changing measurement frameworks to account for how audiences are interacting with more connected media channels like video. In 2015 we’ve seen several agencies and brands really start to crack the code for ROI measurement for video and even seeing budgets starting to shift from Direct Response to Television as offline sales effectiveness for video is starting to be better understood
Media vendors from Twitter and Instagram to Snapchat have jumped on the video bandwagon – who do you think has embraced it most successfully?
Right now a lot of social platforms are integrating video into their products as a way of increasing engagement and loyalty with their users. Naturally, the type of video content being created, uploaded and shared typically reflects the social platform’s unique qualities (e.g. short, bite sized video for Twitter). As such, these platforms are not seeing TV ad investment en masse yet because we’re still talking about essentially native advertising environments that may require custom development of TV advertising assets and an understanding of how to communicate with audiences in such unique environments.
Clearly many of the players in the space are looking to crack the code for attracting TV audiences and I have no doubt that content investment and curation are a big part their plans to lure audiences to more of an immersive TV-like experience. We’re in the middle of a considerable consumer shift in the way video is being consumed and I’m confident there will be some major disruptors joining the party.
Are issues around viewability holding video back from securing a larger share of client budgets?
Viewability is a key metric for our clients across EMEA but its just one of several criteria we think are important to measuring success for video. The ability to measure viewability, alongside other quality metrics such as player size, % human traffic and engagement is becoming table stakes for the industry now and we are encouraging all of our partners and clients to move towards commonly defined standards. There are still challenges: VPAID remains the only consistent way to collect measurement data as a third party, yet VPAID continues to be a concern for many premium publishers and broadcasters given security issues and lack of control over the player experience. This is where we need better collaboration as often the inventory with the best performance and highest viewability is the least measurable. As such, we urge our platform users to use many reportable metrics as guides for optimisation, even if they are not always mature enough to be used as a trading currency.
How is programmatic video changing the relationship between brands, agencies and media owners?
The rapid change we’re seeing in the TV space is driven by accelerated fragmentation of consumption. That’s making it harder for brands to reach audiences at the same scale with the same number of touch points, it is creating challenges for content owners and broadcasters whose audiences are less predictable and it is compelling technology companies to find solutions to create order out of the chaos. This has meant brands and agencies are upskilling their knowledge and understanding of technology and increasingly making longer term alliances with platform solutions that are compatible with their businesses long term. It also means a redefinition of what success looks like for TV: the abundance of new data sets for targeting and measurement are creating new frameworks for trading and a broad push for success criteria beyond achievement of audience demographic rating points.
What other challenges do you think must be tackled to ensure video’s success in 2016 and beyond? What are your predictions for the coming year?
2016 is going to be a seminal year for the TV business in the UK. I think we’ll see some products launch that will permanently change the game for the way TV is bought and sold. These are my top predictions:
A new measurement currency. We’ve seen phase one of BARB / Nielsen’s Project Dovetail complete in 2015 with total hours consumption by platform / device now reported. That in itself has been interesting in that we now have a third-party validated view of the magnitude of non linear viewing by device. But it’s a baby step, in that we don’t yet have a true understanding of the reach & frequency overlap of audiences across devices. Is IP connected app viewing or STB VOD additive to TV consumption, or are we seeing erosion of core audiences from the linear stream? And if so, what does that mean for the way audiences are traded in future as the digital winners and losers emerge. As Project Dovetail moves from device based to audience based measurement we’ll start to unlock some of the answers. But I also think we’ll see new challengers to the BARB throne as STB datasets start to link to digital datasets at scale. WPP’s investment in Comscore / Rentrak is a signal of the ensuing battle that will no doubt play out over the next few years.
Open or closed? 2015 was the year of the ‘walled gardens’ as Google, Facebook, Verizon/AOL, Amazon and Yahoo all made moves to create and manage their own audience ecosystems, with no interoperability with each other and ultimately taking marketers one step further away from the end goal of being able to manage audience reach / frequency holistically. I think we’ll see further entrenchment of this trend before the pressure from the ultimate customer, the advertisers, becomes too much to bear and we start to swing back to a more open ecosystem. Closed marketplaces only succeed if all the players within the ecosystem benefit – in this case there are too many losers holding too many cards.
Unbundling and direct to consumer. This is a trend that hit the US in a big way in 2015, and I think will create some disruption in the UK in 2016. Consumers are starting to question the value they are getting from bundled broadband, payTV subscription and telecommunications packages when direct to consumer offers are now so strong and such good value (think NowTV, Netflix, Amazon Prime, All4 etc). In the US we’re starting to see some attrition of the typical bundled offer as consumers (particularly younger, time poor, urban dwellers) opt for more of an ‘a la carte’ approach to the way they consume content. This will create interesting dynamics between broadcasters and platform operators as the traditional economics of distribution come under pressure. OTT (Over the Top) offerings represent both an opportunity and a threat as data collection and the consumer relationship further fragments. It also underlines the need for significant investment in systems integration to stitch together disparate platforms and data sets – that’s an area we are massively focused on here as a company at Videology.
