Predictions: What's in Store for Digital Video Advertising Next Year
As we approach the end of 2012, I like to think about 2013 and what it holds for the video ad category. However, before I do, I enjoy the intellectually honest process of reflecting on my 2012 predictions to see how well I fared.
1. Aggregators (networks/exchanges) will further their lead in the video ad category, serving nearly 75% of video ads.
(Grade: A-) Although networks and exchanges didn’t reach 75% of all video ads served, they do currently make up 67% of the top 20 video companies by volume. There is no doubt that their dominance continues to expand and their influence continues to grow. The vast majority of the top 20 video companies by ad volume are networks or exchanges and the losers in 2012 were the premium and mid-tail publishers that tried to maintain legacy CPMs from 2010 and 2011. The real surprise winner of 2012 was YouTube with the success of its TrueView unit, which scaled to over $1 billion in revenue while still being perceived as overly expensive.
2. Real-time bidding (RTB) in video advertising will become commonplace, both empowering and disrupting the existing publisher, network and exchange ecosystem.
(Grade: A) RTB was my favorite topic of discussion at the end of 2011, and it remains my favorite topic of discussion today. The facts are simple, and RTB’s inevitability is clear -- embrace or be replaced is the new mantra. The players in the ecosystem that embraced RTB grew at 100%+ in 2012, while those who did not grew slower than the market (less than 40%). RTB is the most important trend in digital advertising. Full stop.
3. Mobile video ad inventory will become comparable in size to online video ad inventory.
(Grade: B) Mobile video ad inventory grew beyond nearly every estimate and actually peaked at nearly 50% of global video ad inventory, according to internal BrightRoll numbers. However, due to overall low fill rates across the industry, publishers did not continue to onboard video ad inventory as fast as they could have. So it’s premature to claim mobile ad inventory is comparable in size to online video’s. That said, this is another inevitable trend, especially considering the fast rise of the tablet as the future of video consumption.
4. Audience measurement will become a hot-button industry issue as video ad campaigns at scale are scrutinized for in-target delivery.
(Grade: A+) Although I am skeptical of anyone giving him or herself an A+, I was more than right on this one. Audience measurement, particularly Nielsen’s OCR, was the hot topic among most industry leaders I talked to, culminating in the Nielsen Global Client Summit, which was one of the most valuable events I have been to in the history of digital video advertising. In-target delivery on a guaranteed, or at least currency, basis is the future of media buying digital video. Expect many more products and efforts in these areas throughout 2013.
So here are my new predictions for 2013:
1. Brands move toward single-platform solutions. With the proliferation of publishers, networks and exchanges, brands are becoming increasingly confused about the additional value provided by an incremental vendor, and skeptical about the amount of their budget being spent on intermediaries. As a result, brands are moving budget toward platform solutions that provide a single point of contact, massive inventory and advanced targeting/optimization capabilities. I expect many brands to test out their existing display platforms as part of their initial foray into the single-platform arena, but believe that video-only platforms will continue to take share as the video ad platform category continues to mature.
2. More video ad exchanges. I once wrote an article titled “A New Silicon Valley Rule? All Great Internet Cos. Build an Ad Network.” Today, the new mantra is that all Internet companies must build an ad exchange. Think of the list -- Yahoo, Microsoft, Google, Facebook, AOL and Amazon all now have ad exchanges. However, only Google offers video at any scale on the exchange side of the video business. I expect all major digital media companies to make the buy vs. build decision in this area and either build or buy programmatic video ad offerings in 2013.
3. 3rd-audience measurement becomes a currency. There is no doubt that more advertisers demand audience measurement from Nielsen and comScore with clear expectations around in-target delivery. However, 2013 will be the first year when a significant percentage of campaigns are delivered with an audience delivery guarantee, which will require money back or make-goods in the case of under delivery.
4. Mobile video ad inventory will become comparable in size to online video ad inventory. I am reposting my goal from 2012 about mobile because I think this remains inevitable. Mobile video ad inventory is growing faster than any video content category in any medium in history. The only question is: How big it can get in 2013?