With a new year — and new decade — upon us, who better to ask about the view ahead for advertising and video in particular than Iván Markman?
Markman is chief business officer at Verizon Media, owner of brands including Yahoo, HuffPost and TechCrunch -- not to mention that its parent company has launched 5G in 31 U.S. cities this year.
Markman was tapped to grow Verizon’s media business after it was rebranded with the Verizon name, from Oath, in January 2019 — a name change that reflects media being a “core pillar” of the company.
His decade of marketing tech experience prior to Verizon included seven years at Yahoo -- including as vice president of corporate strategy -- launching a startup that was subsequently acquired by Neustar, and acting as an advisor to Comscore’s leadership.
Here is a lightly edited Q&A.
What are the most important video trends for the year ahead?
More than 80% of marketers see digital video becoming a greater chunk of their marketing mix as consumer adoption continues to shift there. But the key question is what type of video formats will ultimately dominate the market.
First, video will continue to evolve, with an all-out battle between subscription video-on-demand (SVOD) and advertising-based video-on-demand (AVOD) business models.
There will also be some major growth in rewarded and user-initiated video formats.
Why will more advertisers be incorporating user-initiated formats across their campaigns?
There are three reasons. First, in today’s transparency-focused landscape, campaign performance is critical. For advertisers, interactive formats naturally support performance, as well as measurability. Playable ads are a great example.
Second, autoplay video formats, which are so common across the web and have been great for advertisers and publishers alike, are now evolving to integrate user-initiated features.
Traditionally, most autoplay video ads have run for 15 seconds. Now, however, more vendors and publishers are amplifying those formats via interaction. They are extending the ad’s duration, for example, if triggered by a click or a touch.
Finally, user-initiated video is a perfect format for mobile. Mobile devices allow for a rich set of gesture possibilities. I expect that mobile native formats, in particular, will become more interaction-driven.
What other format shifts are ahead?
We will also see a greater convergence of traditional long-form formats (long-form and TV) and emerging formats (more short-form, largely mobile and OTT). These will create more and more valuable opportunities for advertisers, publishers and consumers to engage.
Traditional and digital video are coming together like never before, creating a variety of new and exciting advertising opportunities.
Some of the more notable examples are occurring in the television space. Connected television (CTV) and addressable TV, for example, are making TV and long-form content — whether linear or non-linear — more targeted and measurable.
This is why more advertisers are now shifting spend away from traditional TV, to these "smarter" channels. In doing so, they can also connect more seamlessly all of their advertising, using the same segmentation and integrating how they engage with consumers across all channels (e.g., connect CTV with digital out-of-home experiences).
Also, as more broadcasters and content owners launch video-on-demand services, we could see an evolution away from more traditional SVOD to AVOD.
AVOD could become a more attractive offering for brands because of the targeting capabilities and performance tracking afforded there. I also think that ad-targeting across AVOD services will grow more nuanced and personalized, thanks to better data and better data capture, making AVOD more attractive for all consumers who have historically opted for SVOD.
AVOD will also be a more affordable model for the end user, as the number of SVOD services that require a monthly fee surges.
Interestingly, as more SVOD providers launch services for a flat rate per month, consumers are becoming more conservative about the services they sign up for.
SVOD players will need true content differentiation to carve out market share. Disney’s Disney+, with everything from Iron Man to Disney classics and exclusive originals, is a good example of a winning combination.
Do you have specific indicators in mind when you say consumers are becoming more conservative about the SVODs they sign up for?
A recent study by The Hollywood Reporter and Morning Consult found that many consumers will pay as much as $37 per month for three SVOD services, although most want to limit their monthly spend to $21. The bottom line here is that there is a clear ceiling for SVOD service investments.
For that reason, to carve out share and win in today’s market, SVODs will need to have a clear value proposition. That means unique and exclusive content at a reasonable price, and most importantly, continued consumer experience innovation.
Disney+, with everything from “Iron Man” to Disney classics and exclusive originals, is a good example of a winning combination.
How will video streaming and advertising change when 5G is in place
across the U.S.?
As more video viewing shifts to mobile, 5G will change digital entertainment forever.
5G’s speed will
mainstream data-heavy digital video experiences, like XR and interactive creative (AR, VR, 360, etc.), while supporting the streaming and live-streaming of content. It will enable a lot of innovation,
especially in more interactive types of video.
And 2020 will be a huge year for 5G, as its overall footprint will become much more robust. That will have a dramatic impact, I think, on consumers as its benefits will be clearer and more noticeable.
We firmly believe that 5G is the future and that it will fundamentally reshape the way we consume digital media. It will transform content and commerce experiences for consumers and advertisers alike.
What broader advertising trends will be most influential in 2020?
Trusted content is one. An election year is always a big year, but 2020 will bring special challenges and opportunities for advertisers. It will be shaped by recent changes in privacy regulations, pressures around “fake” news and advertising, and technology innovations offering more relevant news and ad content.
Advertisers ignore consumer needs at their own peril, and consumers want to be able to trust what they see and hear. Our own news consumption studies have shown this over and over.
Half of consumers surveyed say they choose news sources based on credibility alone, and they like brands that advertise on trusted sites. It’s time for our industry to step up and offer choice and transparency to earn consumer trust. The stakes have never been higher. 2020 will be the year of trust and choice.
Another major opportunity lies in the continued explosion of native advertising.
Brands spent $44 billion on it this year, per eMarketer’s estimate — and that number will climb as emerging channels deliver more turnkey formats for buyers.
AR ad spend, for example, will rise from $780 million this year to nearly $3 billion by 2022. Investment is following consumer adoption as AR user growth surges.
But one key to AR marketing’s success is the improvement in the native ad experience, with vendors and publishers innovating features and content. Innovations like a smoother user interface, adjustable overlays, and smartphone camera changes have attracted brand interest.
Pottery Barn, for example, used native AR ads to help shoppers see home decor options in their actual home. Other brands, including Chevrolet, Volvo, JCPenney and Home Depot, are doing the same.
In 2020, savvy brands will invest more in emerging native ad formats like AR. And mobile connectivity advancements, especially 5G, will pave the way for more user-friendly and immersive experiences that will be delivered and streamed in real-time and at scale.