The latest State of the Video Industry report contains lots of good news for advertisers, agencies and publishers. The sector is moving along at a heck of a rate and we’re starting to see budgets move from offline media, like print and free-to-air TV.
The most significant issue, it seems, is that there still just isn’t enough inventory. A nice problem to have, although, like Australian house prices, scarcity could ultimately challenge affordability.
The second annual report also highlighted another significant factor – the growing disparity in opinions on ad viewability. Two-thirds of ad buyers that participated in the survey said it was an issue, yet only 35% of sellers saw it as a concern.
In the US, where Adap.tv also publishes a State of the Video Industry report, sellers and buyers are as concerned as each other – up at equivalent levels to buyers here in Australia. So, why are Aussie publishers more blasé?
More than likely, it’s because publishers are confident that they have the issue under control. A lot of inventory in Australia is sold directly, with half of publishers saying they now run a private video ad marketplace. Of the remainder, half plan to implement one in the next 12 months. Thanks to technology, they can control the quality of their offerings.
Meanwhile, buyers are sourcing inventory from US publishers to bridge the shortfall in local content. Whilst they might be confident about the offerings of local publishers, overseas material is more of an unknown entity; hence, they are as concerned about viewability as their US peers.
The issue could be solved, somewhat, if we had more local content sold through platforms that provide real-time performance data. This would allow publishers to quickly identify which inventory is underperforming and investigate the problem – whether it’s viewability, coding errors or content that simply doesn’t match the profile of the target audience.
Currently, less than one-quarter of video inventory is sold through programmatic trading, but evidence from overseas suggests that it will grow quickly in coming years. As this happens, advertisers will have greater access to real-time data, so they too will find it easier to determine why some content performs better than the rest. A publisher with poor ad viewability will quickly be dropped from the schedule. As one respondent to the State of the Video Industry report put it: “It’s not about the most impressions, it’s the right impressions.”
There is definitely some disparity in the way sellers are adjusting to the new wave of digital trading. While two-thirds of publishers reported an increase of 25% in CPM rates, there has also been an increase in the number of publishers seeing a decline, moving from 21-30%, indicating a further differentiation in the value of different inventory types.
In response to market feedback, the more advanced publishers are beginning to organise their inventory into different pools to match buyers’ preferences for audiences rather than content.
Technology helps identify inventory performance at a granular level, but it does require that inventory is organised and structured the best way for programmatic trading, and that it’s very clearly labelled in order to achieve the best possible yield.
Many publishers still believe platforms facilitating real-time bidding are driving down CPM rates. Indeed, half of all publishers in the report believe there’s a risk of commoditising content, although many are using private trading platforms to give them more control. Conversely, more than half also recognise that these platforms provide better merchandising for their inventory.
For publishers, though, it’s not just a question of technology providing greater exposure for their content – it’s also about the benefits of being able to analyse sales performance in detail. It always helps to see what your customers are buying and what influenced their decision-making.
It means you can focus on quality content that matches buyers’ needs. It also highlights issues like ad viewability: poor quality inventory produces inferior results.
In reality, data is power and the more you have the greater control you have on your advertising yields.
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