The State of Online Video Advertising 2015
“When we talk about programmatic ad sales, it doesn’t mean every last step is done through machines,” Hallerman says. “Often the basic parameters of a deal are negotiated by humans, as they traditionally have been, but then when it comes to the actual time for buying, for being able to target audience segments, that is done automatically in order to do it quickly and get the audience when you can.”
In 2015, Hallerman sees the ultra-efficient programmatic method growing in importance. Online video is expensive for digital advertising, he notes, and programmatic’s targeting abilities help advertisers get their money’s worth: Efficient buying lowers costs, while targeting means buyers can get the same results with fewer impressions.
While Hallerman has seen live online video grow in 2014, he says this is still an area where TV has a strong edge over digital. In these areas, it’s important for buyers to blend their ad buys across media, he notes. For buyers, he sees episodic content as equally attractive.
“[Live] has an attraction, but episodic content does too,” Hallerman says. “Today, I was reading one of the end-of-the-year ‘best TV shows of the year’ articles. Two of them are internet-only shows. At least one of them started as internet-only and the other still is; the point being that it’s the type of content that is increasing online. As I say, episodic content, which is TV-like content, is also attracting advertisers, not just live.”
TV is an art form, Hallerman adds, and it doesn’t matter if the shows are available by broadcast or online. The audiences and advertisers know quality when they see it. If it brings viewers back for another look, it pleases advertisers.
Will online continue to pull ad dollars from broadcast budgets in 2015? To a degree, Hallerman says, but most online increases are coming from print budgets and banner ads. Banners aren’t seen as all that effective nowadays, while print is overpriced relative to the amount of time people spend viewing the ads.
“In the internet space, banners have become so commodified that companies can still use them to support their ad campaign but get the same amount of impressions for less money, and therefore shift that money to digital video,” Hallerman notes. “If the increases in spending on digital video are coming from shifts in budget, overall more is coming from print and from banners. Some is coming from TV.”
It doesn’t have to be a one-to-one trade-off, with one advertising type suffering and another growing, because Hallerman notes that there’s more money being spent on ads overall. Advertisers might be cutting back on TV, but not by much. In fact, TV is still getting more new ad dollars per year than digital.
“You take one year’s spending, say 2015, and you minus the previous year’s spending. How many new ad dollars, so to speak, will increase in spending relative to the previous year? In 2015, we project that digital video will get $1.81 billion over last year, but TV will get $2.06 billion new dollars over last year. There’s still more additional dollars flowing to TV than digital video,” Hallerman says.
TV ad money is safe in the short term and it’s safe in the medium term, as well. Go any longer than that and the two areas will be so blended that the distinction won’t matter anymore.
Shakira starred in the most-viewed branded video of 2014, sponsored by Activia—even though Activia’s branding in the video was minimal, and came only at the beginning and end.
The desire for advertisers to settle on a standardized metric for TV and online video ad buying is nothing new. Hallerman remembers writing a report on it 12 years back, when he was new to eMarketer. Don’t look for the final answer to come in 2015, he warns. Viewability, however, will become increasingly important.
“In terms of metrics, to have ad placements with sure viewability where the ad is viewed for more than 3 seconds or the ad is viewed by a real person and not a bot or the ad is viewed because it’s top of the screen and not running below the fold will become an increasingly important metric,” Hallerman says.
Advertisers have a similar problem when they buy TV ads, Hallerman notes. How does the buyer know if viewers are paying attention? Viewers could walk away or get a snack—there’s no way to know. Desktop viewers could click another tab while an ad plays, so that an above-the-fold play isn’t actually viewed. More accurate metrics will help solve the problem.
On the topic of mobile video, Hallerman sees the term combining two quite dissimilar viewing options. Smartphones and tablets are both portable and run on iOS or Android, but the experience isn’t at all the same. Only one of them will be highly attractive to advertisers.
“Even though tablets are owned by fewer people, there’s more money going to be going to tablets because they’re great media consumption devices,” Hallerman says. “Kind of like TV, people are consuming content and they’re watching videos of different sorts, and it works well for ad placement.”
While most of us have smartphones by our side every minute of every day, even when we sleep, the experience is more cursory. People go in and out of apps and video clips at a fast rate. To succeed here, advertisers need to learn to offer shorter ads that work with shorter clips. While Hallerman sees mobile video advertising growing in 2015, he doesn’t see it growing quickly.
In deciding what online video advertising topics will be important in 2015, Hallerman has his own unique criteria:
“Some things are both buzzwords—like ‘programmatic’ or talking about ‘viewability’—and real at the same time. When something is both a buzzword and real, that’s the stuff you have to pay attention to.”
[This article appears in the 2015 Streaming Media Industry Sourcebook as The State of Online Video Advertising.]
What about the current mess of player types, lack of standards, and constant buffering do video publishers and advertisers think is good?
Video advertising has been experiencing rapid growth. Now, as it begins to mature even further, we're starting to see more powerful video advertising tools and a more cohesive overall picture.
Online video advertising is taking in more money, but isn't growing as a percentage of total online advertising. What will it take for video ads to break out?
The online video advertising market has been slow to take off, but with the growth in tablet usage and social media—not to mention real-time bidding and other innovations in advertising networks and formats—it's finally moving toward maturity.
As more ad networks appear on the scene, with better solutions that are easier to use, advertisers are opening their pocketbooks.