Three Steps to Sustainable Video

September 27, 2018

By Eric Berry

ET-ARTWORKS/Getty Images

The bandwidth necessary to support pervasive high-quality mobile video content consumption is becoming commonplace and 5G is rolling out across the country. As this standard proliferates, mobile — and thus, all — video consumption will explode at increasingly dramatic rates, compounded by the rapid uptake in OTT and CTV platforms. Unlike display advertising, where standardized formats have risen only to be mis- and overused, streaming video presents a ripe new opportunity for publisher monetization to develop in a consumer-friendly way that presents a more sustainable advertising experience.

Display advertising became the standard but became more and more intrusive, finally culminating in an unsustainable ecosystem. Users have installed ad blockers at alarming rates primarily because ads are disruptive and intrusive. In TV, we are witnessing the same pattern — ad loads have increased year-over-year to the point where even network executives have conceded an overabundance. For streaming video content, however, a different standard and consumer expectation has been defined.

Publishers will require supplemental monetization; however, most won't be able to match the breadth and quality of content provided by Netflix, Amazon Prime, and Hulu Plus at anywhere near the same price point. Nonetheless, these dominant platforms have defined the standard, meaning publishers cannot provide dramatically worse experiences or users will flock elsewhere. Thus, for publishers, we propose three steps for better video ads that can create a sustainable video publisher monetization ecosystem:

1. Accepting reality.

Netflix has no interruptive advertising and no intention of pursuing that path. Amazon Prime has also taken an ad-free model while Hulu Plus, as well, offers a huge range of content without ads. Product placement has been taken to a higher level while high-quality content is provided at relatively low prices. To compete, video publishers must have monetization that provides nearly equivalent user experiences at similar or lower price points. Simply put, digital video cannot be effectively monetized with the same type and level of ad load as used in linear. Users will simply go elsewhere. Those expecting to reach any meaningful level of sustained scale, but simply stuff more and more 30- or even 15- second ads into their content, will be disappointed in the medium term. Instead, energy should be spent identifying and investing in viable alternative solutions.

2. Embracing reality.

Rather than run from this truth, video publishers should embrace the reality of what monetization can and should be. Consumers will be spending more and more time with their devices, consuming more content than ever before. Distribution will not be locked behind cable or satellites — the relationships will be more directly with the consumer through apps or similar means. Future monetization will be addressable and programmatic, meaning user-level; contextual and other targeting can dramatically increase yields above generalized demographic guarantees and the scatter market.

3. Extending reality.

If video publishers are limited in terms of the pre- and mid-roll advertisements that consumers and the market will bear, then they will need to find alternatives. The viable alternative is simple extending the reality, or the set of available options, for their video monetization. The goal is ultimately for advertising technology to inject personalized custom messaging directly into the stream of content. This does not mean server-side 30-second ad stitching. As Ralf Jacob, president of Verizon Digital Media Services predicted, "[the ad] might appear within that scene as a poster on a wall or a branded object on a table. Such solutions could also be interactive, allowing the viewer to click through and learn more about a product or service that interests them."

In short, publishers must look beyond the solutions of the past to monetize video in the future. There are any number of interesting steps between 30-second pre-rolls that will drive their users away and the ideal state that publishers would be better off exploring.

The future of video is an exciting and highly lucrative world. Publishers and ad tech alike have the ability to create differentiated and lucrative platforms. In order to achieve this, however, we must learn from past mistakes and focus on how we as an industry can achieve better outcomes for consumers and publishers alike.

 

Eric Berry is co-founder and CEO of TripleLift, a programmatic native ad platform.

 


The views and opinions expressed in Marketing Maestros are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.


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