Commentary

Why The Streaming, Linear TV Worlds Should Care About 'Outstream' Video Ads

by Dave Morgan , Featured Contributor, September 7, 2023

Many in the streaming and linear TV ad industry are livid about the recent revelations from studies from both the ANA (Association of National Advertisers) and the ad research firm Adalytics exposing tens of billions of wasted spend in the programmatic ad world on web properties that are “made-for-advertising” and don’t actually possess intrinsic consumer content or on pages with video advertising units (many labeled as streaming TV) that are non-viewable and sound-off.

They should be livid. Advertising rates for "in-stream" video advertising are typically four times higher than thumbnail video on web pages, and those that are non-viewable and/or with sound-off are worth very little or nothing to advertisers.

And now that we are seeing real fungibility of the $60+billion linear TV annual advertising spend in the U.S. into CTV and streaming TV platforms, a lot of folks should care about the quality of the digital video ad units that are capturing that spend.

Given the incentives for publishers to describe their digital video advertising inventory as broadly as possible and for programmatic ad platforms to drive as much spend for as much money at as much volume as possible, it’s not surprising that billions of dollars of spend — intended for pre-roll, mid-roll and post-roll video ads that are truly “in-stream” with video content requested and viewed by users — are being diverted into web video units that operate nothing like that. Just follow the money and it all makes sense.

Fortunately, the IAB identified this as a problem last year in its call for greater transparency in video advertising and, this past spring, IAB Tech Lab issued new video ad definitions to better discriminate between “in-stream” and “out-stream” video ads. See below:

In-Stream Video Ad

“Played before, during or after the streaming video content that the consumer has requested (Pre-roll, Mid-roll, Post-roll). These ads cannot typically be stopped from being played (particularly with pre-roll) but can sometimes be skipped.

This format is frequently used to monetize the video content that the publisher is delivering. In-Stream Video Ads can be played inside short or long-form video and rely on video content for their delivery.

There are four different types of video content where in-stream may play: UGC (User Generated Content/Video), Syndicated, Sourced and Journalistic. In-Stream Video Ads are displayed within the context of streaming video content.”

Outstream Video Ad

“A form of video advertising that takes place outside of In-Stream Video content. One type of outstream video is in-feed video ads which are found in content, social, or product feeds. Another type of outstream video ad is in-article video ads that are served between text.”

With “in-stream” video ads having become synonymous to streaming or linear TV ads for many advertisers and buyers, it is critical that what is actually “out-stream” is properly segregated and tagged.

A review of estimates from industry experts on social media and in the trade press suggest that 80-90% of what had historically been defined as “in-stream” will now need to be defined as “out-stream.” That is a lot!

Unfortunately, publishers need to properly classify their inventory, in spite of most likely earning less money if they do it properly. DSPs and SSPs need to police and enforce these classifications, even if to do so might hit their short term revenue and create confusion and friction.

In addition, advertisers and buyers will need to care, and to force that this level of transparency on inventory quality is actually adopted as a standard, even though it will mean paying higher prices. Of course, the benefit is that the advertisers will get real audiences, real attention to their ads and will actually support the creation of content that makes a difference in people’s lives and in the health of our society.

Is this too much to hope for? So many of the market participants’ incentives are to keep doing things the old way, transacting on bad inventory as if it was good. I am hopeful, but we need your help.

Please, please, please demand audits of video ad inventory classifications on your DSPs and SSPs and deny usage and money to those that don’t comply or don’t pass those audits. We need to treat “out-stream” ads as “out-stream,” not as TV-quality “in-stream” ads.

What do you think?

ad buys, ad inventory, ad spending, advertising, connected tv, content, iab, media buying, programmatic, research, streaming, television, video

7 comments about "Why The Streaming, Linear TV Worlds Should Care About 'Outstream' Video Ads".

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Ed Papazian from Media Dynamics Inc, September 8, 2023 at 7:57 a.m.
Dave, any traditional national TV advertiser that doesn't insist that its agency buyers buy CTV time direct from the sellers---not programmatically----deserves what he gets---or, more properly, doesn't get. What's so difficult about buying direct? There are only a relative few AVODs and FASTs that would be considered----not thousands of them. In a direct-with-seller buy all of the brand's requirements would be spelled out regarding the kinds of pacements, excess frequency, definitions of exposure, etc. ---the only problem being the need to monitor the buy to see if the seller is doing what's been promised . If the seller fails to deliver then the advertiser can fail to pay. As for the others---who can't be bothered to buy the direct way, that's too bad---maybe they will get some benefit from their ad spend------maybe not.
Reply

Dave Morgan from Simulmedia replied, September 8, 2023 at 9 a.m.

Ed, unforunately and as you know, agency-side research departments are basically gone and the number of experienced natoinal TV buyers has shrunken enormously, much faster than spend has slowed. Plus, the digital video buyers know a lot about programmatic systems and very about inventory quality since they are used to buying performance media most of the time.

Ed Papazian from Media Dynamics Inc, September 8, 2023 at 9:41 a.m.

Yes, Dave, I know what you are talking about but much of this is a functionof advertisers cost crunching their agencies in an endless campaign to spend as little as possible for their services---at a time when media planning---and especially media buying has become so much more complicated. So I blame the "clients" and specifically the CMOs for their continuing infatuation with the "creative" aspect---"The Madmen Syndrome"---and their failure to understand that getting their ad mesages seen by the right consumers in the best contexts with a sensible amount of repeat frequency is also important.

Sadly, I don't see a change in this fixation on "creative" forthcoming either at the advertisers or, to be frank, on the agency side. We can dicsuss these problems at leagth and wring our hands over it ---but the CMOs don't read what we are saying or attend "media" meetings so we are, in effect, talking to ourselves.

Jack Wakshlag from Media Strategy, Research & Analytics, September 8, 2023 at 11:46 p.m.

So much money spent. So much apathy.

Dave Morgan from Simulmedia replied, September 12, 2023 at 1:18 p.m.

Jack, it's incredble that there is so little care around this issue. It deoesn't speak well of today's media industry. The media research community has been hollowed out and is nowhere to be found on this. All of the work is coming from outside researchers shocked that the industry does such a poor job policing itself.

Jack Wakshlag from Media Strategy, Research & Analytics, September 12, 2023 at 3:14 p.m.

Finding out that you've been mishandling this for years and then doing something about it is a scary proposition. Incentives for doing so are just not aligned. Everyone is making money looking the other way, including most firms who say they look. It will take a very sharp law firm to identify a client or set of clients whose interest is in recovering the money lost. But then they will settle and little will change.

Ed Papazian from Media Dynamics Inc, September 12, 2023 at 4:45 p.m.

In fairness to the media researchers at the agencies but it's not their job to see to it that buyers get what they thought they were buying.---never was. In fact, while every one is wringing their hands and complaining---as they should be---what's lacking is a clear definition of responsibility. In traditional media---aka "legacy media"---it has always been the seller's responsibility to deliver the goods as ordered and the buyers' job---via post buy analysis---to check to see if this was the case. To do this the buyers needed---and had---independent third party information---audience surveys, circulation audits, access to station logs, services that monitored commercial placements, etc. But in digital media land---with its walled gardens--- such independent sources aren't available. Which means that until the walls are broken down, the blame falls directly on the sellers---not the buyers or the advertisers and certainly not on the overworked media researchers at the agencies.