• by Harry Kargman , April 21, 2014

Mobile pre-roll is defined as a video advertisement (usually 15 seconds or 30 seconds) that immediately precedes a publisher's video content: "video on video," if you will. The expected experience of mobile pre-roll is that a video advertisement will appear immediately before the editorial video content in the same video player.

Much of what is being sold today does not meet this litmus test. There is much greater scarcity of mobile pre-roll than the industry recognizes -- and the market needs a whistleblower. Given the shortage and difficulty of serving true mobile pre-roll and the growing demand to buy it, many ad networks sell pseudo-pre-roll in order to capture the higher volume of dollars at higher CPMs.

As pre-roll is the closest analog to that of the television commercial, media planners and buyers are looking to scale up their digital video initiatives with clients  most comfortable with television advertising. Brand clients are comfortable shifting dollars to digital video from television — with the caveat that the video plays adjacent to the video editorial content. However, video editorial content views are limited, and stitching ads to them is even scarcer.

Given these constraints, many industry players are repackaging pop-up interstitial video ads (that play on the page potentially targeted to the video section) and in-app video SDKs (that play in their own wrapper), and calling a video player to play the video content as pre-roll -- even though the "true adjacency" does not exist.

Knowing that pre-roll is sold incorrectly, many of these players offer discounts on their flavor of video advertising. The true scarcity of pre-roll is not taken into account in their pricing.  In essence, those players that are trying to sell true pre-roll are priced out of the market, given the nature of how the pseudo-pre-roll is sold. As the majority of "mobile pre-roll" becomes some flavor of interstitial video units, pricing on true pre-roll falls out of flux.

This matters because the industry is building pricing expectations on a fraudulent inventory type. Media buyers are buying a cubic zirconia but are expecting a diamond.  Like a diamond, the cubic zirconia looks good -- but it is not what media buyers ordered. There is definitely room in the market for video interstitials placed intelligently on mobile sites and apps, but they should be priced separately from that of true mobile pre-roll.

Clearly, today’s winners are those who win pre-roll dollars, while not serving a true pre-roll product. However, this is not sustainable. We need to shine a light on exactly what is being sold and price the inventory accordingly. True pre-roll pricing should reflect the shortage in the marketplace, and media buyers (and their clients) should know to differentiate between strategically placed video interstitials and those of a true pre-roll ad.