Commentary

Will TV-Like Ad Experience Be Key for Online Video's Success?

by Andrei Dunca , October 16, 2013

If money follows time, then as consumers shift their viewing to mobile devices, advertising share shifts away from TV and toward the new premium-video online ecosystem.

As that shift starts to happen -- and it already has -- online video companies will have to create new revenue opportunities. One such opportunity, yet to be fully realized: the ability to run several real-time bidded ads in a sequence, similar to a TV commercial break. In some circles, this is called a pod.

Pods allow for online publishers to increase their ad load, which create more impressions without needing to increase the number of viewers or content streams played. Even more important, pods allow publishers to replicate TV ad behavior and ad rates by accommodating any sequential combination of video ads within an on-demand or live broadcast.

For instance, within a pod there are multiple slots, or opportunities to show a video ad. Traditionally, all ad slots in the pod are pre-determined and provided at once in a single response. An ad pod that performs real-time auctioning for each slot within has a number of distinct advantages, including:

More dynamic: the pod is more flexible, performing any number of auctions within the time allotted instead of a predetermined number of ads, allowing more competition for each ad within.

Yield optimization: with an auction, competition drives higher cpms for each ad opportunity within the pod, maximizing revenue for publishers.

Conflict avoidance: the problems of repeating ads or showing ads from competing brands within the same pod can be avoided.

Ultimately, RTB-enabled pods would represent a logical progression for the online video industry. This has the potential to open up new monetization opportunities for publishers and more pricing options for advertisers. Of course, get it wrong -- and audiences will be alienated, and advertisers will become wary.

It’s no big secret either that TV buyers are looking for TV-like buying mechanics in online video, to allow them to plan their linear TV campaigns and online video campaigns in the same way. According to Bloomberg, the new ad product Facebook is rumored to be launching on its platform will aim for broadcast-like mass reach -- as opposed to the rest of its inventory, which is micro-targeted -- wooing TV ad buyers with spots reportedly set to cost between $1 million and $2.5 million.

And, as if any more proof were necessary, Adobe’s 2012 Video Advertising Report found that mid-roll video ads, which are more like a traditional TV commercial break, held the most engaging commercial position, with an 87% completion rate performing close to 30% better than pre-rolls.

All of this demonstrates that viewers are engaged by a more TV-like ad experience online -- and that the opportunity for RTB ad ”podding” may be upon us.

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4 comments about "Will TV-Like Ad Experience Be Key for Online Video's Success?".

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Mike Einstein from the Brothers Einstein, October 16, 2013 at 12:53 p.m.
Paula's right, by mid-point we've made an investment in the content, but not in the irritating crap that interrupts things. And the numbers above bear this out, revealing an abandon rate for pre-roll of about 33%. The 87% completion rate cited here of a mid-roll spot in a non-abandoned video would therefore at-best play to less than 60% of the starting audience, every member of which presumably clicked on content they wanted to view but which nearly 4 in 10 felt compelled to abandon because of the commercials. More simply put, why would anyone tolerate the same commercials online that they willingly pay extra to avoid elsewhere?
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Carlos Pacheco from Truly Inc., October 16, 2013 at 1:09 p.m.

This is retarded. The reason online video has so much growth and popularity is because its NOT like TV. Forced ads, lazy and outdated ad techniques only work to diminish the vewers experience and guarantee that they'll find other real content to interact with.

Cece Forrester from tbd, October 16, 2013 at 5 p.m.

You forgot to address avoidance avoidance. If you want them to hate commercials less, allow selective opting out (like turning the page in print) instead of forcing whole pod, relevant or not. (They just looooove that middle commercial, really?) Compulsion is what they hate about TV and what led to technology that allowed them an escape. Why repeat the same mistake?

P.S. What I'm doing during an "impression" is trying to figure out the quickest way to get the heck out.

John Grono from GAP Research, October 16, 2013 at 5:53 p.m.

While the server-side data will show that mid-rolls have a high completion rate (i.e. people don't want to ditch out and go through the whole process again), don't forget that online it takes just one mouse-click to minimise the video player so that the 'viewer' can utilise that time more to their liking. Longer breaks will only reinforce that already very common behaviour. Interestingly, back on the server all appears to be as normal. In a TV environment people will either tolerate the ads, stay in the room and try to ignore them (harder said than done unless you mute the TV), or leave the room and do something more productive (though don't underestimate our laziness).