• by Dave Morgan , Featured Contributor, December 14, 2023

The following was previously published in an earlier edition of Media Insider.

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?