• by Dave Morgan , Featured Contributor, June 20, 2024

Several times last year, I wrote about the need for the digital advertising industry to understand -- and clearly identify and delineate -- “instream” versus “outstream” video advertising. (See one story here.)

For years, many different types of video advertising have been labeled on SSPs and DSPs as “instream,” even if some of the units were “below-the-fold” web video thumbnails with the sound off.

Thus, advertisers and agency buyers trying to execute full-screen, sound-on, high-engagement video ads -- the longtime operating definition of instream -- were often getting units that were quite the opposite. All too often their ads ran on made-for-advertising (MFA) sites where the entire page was just a bunch of sound-off video thumbnails.

Worse, connected TV (CTV) and instream video are frequently bought from the same budgets, much of it coming from redeployed linear TV ad budgets.

Of course, these buys came at discounted rates -- maybe 30-40% cheaper -- which is why the DSPs drove a lot of volume to these “mislabeled” video ads.

Unfortunately, since the real-market value difference between instream and outstream ads is typically 4-5X, the “discount” was illusory. In fact, they were being charged many multiples too much for what they were getting.

Thankfully, IAB Tech Lab got in front of this issue last year, releasing a spec guideline in April 2022 delineating that digital video ads that were not fully instream needed to be labeled outstream, with the guideline formalized in August.

Not surprisingly, most platforms were slow to enforce the change, although work by the Association of National Advertisers, Video Advertising Bureau and Adalytics on MFA sites catalyzed a lot of industry interest in the issue late last year.

So, it was not surprising that the issue hit the ad trades at the end of last week. Apparently, news leaked out about negotiations between Yahoo and The Trade Desk (TTD) relative to how Yahoo would re-label some of the video ads that it sold on the TTD platform.

For sure, it was smart for TTD and all DSPs to take steps with suppliers to ensure compliance to a standard that had been in operation for the better part of a year.

Of course, some of it was lost in the “he said/she said” rhetoric when two companies that each operate DSPs deal with what should be routine issues.

As has become clear for anyone following the issue on social media, most of the big players have been slow to comply with the more transparent labeling.

Platforms such as TTD and Freewheel, to name two, have historically been perceived as tougher on labeling, so it was not surprising to find one of them publicly involved in the first more public airing of this issue.

I am sure that this is just the first we hear of this issue. I hope that it helps everyone in the industry understand the vast differences between instream and outstream video ads. I particularly care because it has had an outsized impact on CTV and linear TV ad spend now that so many see instream video as synonymous in delivering audience attention to those two.

What do you think?