Commentary

Why Video Ad Exchanges Aren't A Silver Bullet

There's a great tradition in the city of Boston, where soon-to-be-brides battle each other for the wedding dress of their dreams at Filene's Basement's annual Running of the Brides. With more than 3,000 gowns available at a fraction of the cost, there are many engaged woman who clamor to take advantage of the tradition.

The challenge is that while there are thousands of dresses, they're not all desirable, the right fit, within the shopper's price range, or worth being trampled over. However, because the deals are so great, the competition for the perfect dress gets fierce. A potentially huge wedding victory can often end in frustration.

Video ad exchanges are similar in this regard. These marketplaces, with access to huge amounts of inventory from supposedly premium publishers, often generate the same levels of optimism among marketers. Just like the famous bridal sale at Filene's, there are deals available within ad exchanges. But buying from this new inventory source is not guaranteed to be the white unicorn that these marketers hope exist. Here are four factors limiting exchanges from helping exchange buyers achieve all their video goals.

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Brand protection. Marketers demand premium inventory for several reasons, one being the amount of trust they have in name-brand sites. Exchange and network site lists are littered with half-truths, but there are occasionally some brand-name sites available. While most of the content on these sites is brand safe, some publishers post content on unsavory topics that will send buyers to running for the hills. Does Citibank want its ad served within a story about a former bankers suicide? Premium sites on networks do not always mean brand safe content; it often means remnant, difficult-to-sell inventory.

Transparency. Site lists are very similar to resumes, in that they are only as trustworthy as the person they are coming from, and they've been one of advertising's biggest problems since the 1990s. There is no cost for listing premium publishers on a site list, so buyers must demand verification from the exchange to ensure their ads are delivered to the sites pitched to them. As with all claims made by inventory holders, whether they are exchanges, networks, or publisher markets, you must demand proof and transparency.

Advanced ad units. The days where pre-roll dominated in-stream advertising are over. Marketers these days demand advanced, engaging ad units, and technology vendors and industry groups have responded with units that incorporate overlays and interactive elements. With these new units come new pricing models, including CPE pricing that means advertisers only have to pay when someone engages with their ad. These units drive better results, but networks and exchanges are often limited in what they can carry, leaving marketers to buy pre-roll on a CPM basis when better units are available.

Communication breakdowns. Of course, distributing these advanced units requires some standardized ad language, and that's where the digital video ad-serving template (VAST) and video player ad interface definition (VPAID) are valuable. These standards facilitate communication between ad servers, publishers and exchanges, but not without some quirks.

There is widely acknowledged discord when it comes to how these standards are interpreted. It's almost like publishers and ad servers know VAST and VPAID, but they speak different dialects of the same language. Ad network X has a VPAID ad, and publisher Y says it can serve VPAID, but it doesn't always work because of different interpretations. When we start using the advanced ads discussed above, the publisher has to know what to do with the interactive elements, how to serve them, and how to fit this into their player without interrupting the video the consumer wants to watch.

If certain publishers can't serve ads, the advertiser loses scale within the network. If a publisher accepts a VPAID ad but can't interpret it correctly, there's a strong chance the product will be buggy. The publisher might not recognize when the ad is complete, or the ad unit could send a different completion signal than the one the publisher is looking for. Unless all networks, exchanges and publishers interpret the standards the same way, smooth communication is impossible, and proper scale goes out the window.

There's a chance that a lucky bride in Boston can show up at Filene's Basement and walk away with a Vera Wang dress for $100, but the odds for that happening aren't overwhelmingly strong. The same goes for video ad exchanges, where buyers can find great inventory to distribute their campaigns, but must accept that there are limitations. Buyers need to distribute advanced creative in transparent environments to optimize against the KPIs brands want, and that's not possible on ad exchanges 100% of the time. Ad exchanges are a good tool, but they're not an end-all solution for video buying. Please keep all this in mind in your search for that mythical marketing white unicorn.

2 comments about "Why Video Ad Exchanges Aren't A Silver Bullet ".
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  1. Mike Denzler from BrightRoll, July 6, 2011 at 2:52 p.m.

    Great analogy! Creates quite the visual...

    All good points. Brand protection, advanced ad units/pricing models, and VAST/VPAID alignment are all problems that should ultimately be solved for through technological solutions. As such, it becomes a matter of time.

    Transparency, on the other hand, is the one that is pure human element: does a network chose to provide, or choose not to provide, full site delivery transparency before, during, and after a campaign runs? You nailed it - buyers must demand proof and transparency.

    Proof and transparency of where the ad ACTUALLY ran. Not just where it MIGHT run.

  2. Jason Burke from clypd, Inc, July 7, 2011 at 6:39 p.m.

    Mike,
    Great point. Transparency can take several meanings, it really does mean "where DID my ad run and can you ensure that it will NOT run on x.com and y.com?"

    Unfortunately, similar to an exchange's lack of knowledge about the video content, adhering to a site list is often not possible for most exchanges given the all-too-common lack of visibility to the page URL on which the ad will serve.

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