Advertising Technology

5 Ways Video Advertising Is Changing the Future of TV

The-Makegood.com_Vijay_Rao_Adap_0375This column has been written by Vijay Rao, SVP of client strategy, research and insights at Adap.tv, the video advertising platform for the world’s largest brands, agencies, publishers and ad networks.

Adap.tv recently published the State of the Video Industry report, which looks at the future of ad buying and selling based on input from more than 750 digital media and marketing professionals at the end of the first quarter of 2013.

Needless to say, the days of media planners habitually allocating all of their spend on TV is rapidly coming to an end. While there were many interesting and varied responses, five major themes emerged from the report that reveal a sea of change. At the risk of stating the obvious, people are viewing video content really differently and reciprocally; the way advertisers and agencies are buying audiences from video publishers is shifting, too:

The Year of Mobile…Video

Mobile figured prominently in the minds of both buyers and sellers of digital video, driven by the advent of better streaming video capabilities on smartphones and tablets over the past year.

Nearly half of buyers of video said that they have included mobile into their media plans for this year, up from just 32 percent last year.  Interestingly, most also say mobile is increasingly a viable complement to broadcast TV and online video, and that’s without any true standard in place to measure audiences across screens. With both comScore and Nielsen poised to incorporate mobile into their cross-measurement efforts, you can expect those percentages to accelerate even higher, very soon.

Video publishers, many seeing marked increases in audiences accessing their content via mobile, are also embracing the notion that TV is no longer thought of as just programming on a large screen, and are making additional investments in their Web and mobile infrastructure. Translation: Expect even more digital TV and over-the-top content deals to be struck soon, and additional “crown jewel” content (i.e. content you actually want to watch) to start flowing to more mobile devices. Case in point, the trail-blazing path of HBO Go in moving the market.

Measurement Pain & Gain

Delivering video content to connected devices is one thing, but making sure there are standards around measuring and transacting ads against that content has proven to be a huge obstacle. While the Nielsen rating standard continues to dictate how well a television program does, Web video employs dozens of metrics, none truly standardized, leaving the ad-buying process fractured and complicated.  While the advent of Nielsen’s OCR & comScore’s competing vCE, has certainly evolved the dialogue, lots of questions still remain about the suitability of the GRP in a world of increasingly sophisticated targeting, as well as the interplay of paid and earned reach and engagement.

Publishers would like better coordination between their TV and digital video ad sales divisions, and clearer insight into how digital channels contribute to overall advertising goals. After all, if viewers are ditching the TV for a tablet, publishers stand to benefit from having a standard way to measure their total audience (and, eventually, being able to sell advertising at current TV pricing levels) across screens. ABC’s recent announcement — offering cross platform ratings guarantees (using OCR) — might well be transformational in moving the buy side to start monetizing their content agnostically.

Viewers Will Get Even Better Content Online

Much of what will happen to television and Web video is still up in the air, but there is one undisputable notion shared by all sides: in the end, the consumer stands to win. Consumers love their new found ability to watch what they want, whenever they want, on almost any device.

And much like the challenges the music industry faced with digital distribution (and piracy), networks run the risk of losing control of their content, if they don’t move quickly enough to sate consumer embrace of on-demand.  Expect a flood of authentication-enabled offerings — part of what the TV industry has dubbed “TV Everywhere” — which extend offline subscriptions to any device while still protecting the legacy models of big media.

Video Goes Social

While video viewing has grown enormously over the past five years, advertisers are still looking at new ways to increase the halo effect of their spend. Many say they are or will be using social media as a new distribution point, highlighted by the recent spate of deals Twitter signed with Turner, A&E, Vevo, BBC, and others.

The bet is that social platforms will become the “water coolers” of old – so promoting video content right next to the water cooler, seems prescient. Bottom line: publishers and advertisers are looking for better analytics to help connect all of their video efforts across screens and platforms, and are placing bets that social will be yet another layer to add to an increasingly complicated stack. Witness Twitter’s acquisition of Bluefin Labs, which lays the foundation for their aggressive courting of TV dollars.

Programmatic Video Will Hit Primetime

One factor holding back money and good content from flooding into the market has been the incredibly complicated process of buying and selling video online. Buyers and sellers want it to be as easy as it is in TV, where deals are still often done via cocktail napkin mathematics and handshakes.

In response, publishers, and advertisers agree that programmatic video trading (and its associated efficiencies) will increase in the coming year, especially as video publishers continue to make premium video available on the Web to capture — and in the case of TV programmers, recapture — their audiences.

As data driven buying and an increased onus on audience smarts becomes an integral part of video planning, TV networks will have to adopt greater digital targeting techniques or risk losing spending to those who can. Bringing the programmatic approach to video buying may well be the surest path of aligning the warmth of the handshake with the sophistication of technology and automation.

We’re only halfway through this year, and have already seen some very interesting and distinct changes in how business is evolving. The pace of these changes continues to accelerate and thus offers tremendous first mover opportunity to reconnect with fragmented audiences and rebuild digital ad revenue…for the agency, advertiser, and publisher brave enough to embrace a new era of TV and digital video convergence.

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