Video Ad Content is Now Pervasive and Powerful

This article was initially published yesterday on theguardian.com.

 

2015 has been an explosive year for video, particularly as it relates to the interplay of technology, advertising and content. Devices are transforming the way consumers watch programming. Traditional business models among broadcasters and distributors are evolving, and advertisers are more questioning of where and how they should be reaching consumers.


Having been in the digital media business since the late 90s, I’ve seen tremendous change over nearly two decades. The pace and depth of that change, however, has never been this rapid. Convergence – or the blurring of lines between digital video and linear TV – is disrupting every corner of the industry in every corner of the globe.


Viewing has moved beyond the traditional television set fed by satellite or cable providers to include connected TVs, computers, tablets and, of course, smartphones. In fact, over the past five years, the time that consumers spend with media has risen to almost 10 hours a day, up from 7.5 hours in 2010. Not surprisingly, the vast majority of that growth is from increased mobile usage. But what some do find surprising is that more than half of all mobile data traffic comes from video.

What consumers are watching on devices has changed

As we try to understand the impact of convergence, it’s important to note that not only are viewers watching more content on connected devices, they are watching more of the same type of content traditionally viewed on television. This has changed the game. In the early days of video, much of the available content was user-generated content. Back then, some tried to argue that in the new age of audience-based buying, content didn’t really matter. An audience was an audience.


Of course, this is not the case. At Videology, our analyses consistently showed that video advertising campaigns run on premium programming, such as full episode TV shows, performed significantly better than campaigns run on long tail inventory.


While premium video content is still scarce in comparison to demand, more quality content is now available across all screens. One reason for this is the investment that companies such as NetflixAmazon and others are making in original video content. The other reason is that broadcasters and cable networks are now less reluctant to make their content available on devices beyond TV.


While they once hesitated to release content because of the feared cannibalisation of their TV audiences, it turns out consumers tend to watch more content, not less, when it is available across devices.


During the last Olympics, for instance, in a study by one of the largest television distribution companies in the US, when coverage was available on TV, PC and mobile devices – as opposed to only on the TV – the time spent viewing more than doubled. And even more surprisingly, the time spent viewing on TV alone actually increased by 40%. Whether these same increases are replicable across all content is uncertain, but we do know that in general terms, converged viewing across TV and video raises time spent on both. In other words, it’s not a choice of either/or; the choice is more.

 

Changed viewing patterns demand converged ad solutions

Of course, despite the overall increase in viewing across all screens, greater choice among viewing channels means greater fragmentation. An advertiser cannot reach as many people on a single device as that advertiser once could on television.


In fact, a simple TV reach curve stretching over the past five years shows that the curve begins to flatten out sooner using the same level of ratings points. This leads to a diminishing return on investment where increased spending does not deliver additional reach. This doesn’t mean that brands shouldn’t use TV; it’s still the single greatest reach vehicle. But it does mean that digital media, particularly digital video, is now often needed to fill in the gaps.


As a result, many marketers are rethinking their strategies, discovering that cross-screen coordination (or convergence) delivers better results. According to a 2013 study by Nielsen and the ANA, only 48% of marketers said cross-screen campaigns were “very important” – but when looking ahead to 2016, that percentage increased to 88%. This is exactly the trend we’re seeing at Videology. In the first quarter of 2015, 84% of all UK video campaigns in our platform ran on more than one device, compared to only 31% in quarter one of 2014.

 

Data is the means for success

Data is the link that is making cross-screen planning possible. From a targeting perspective, data provides insights into a consumer’s geographic location, purchase behaviours, interests and passions. Just as important, however, in the ideal scenario, common data sources connect individuals across devices, allowing advertisers to build incremental reach, control frequency of messaging to an individual and even tell sequential stories to the same consumer over time.


Despite the great promise – and remarkable progress – there are still challenges to truly converged ad planning and buying across all screens old and new. To start, massive data requires ad technology to make it actionable, but many ad technologies that were built for display advertising, then retro-fitted for digital video, are simply not compatible with the way TV is planned and purchased. The companies that own the data in the linear TV world are also, in many cases, not the same companies who own the data in the digital video world.


The reality is that these two worlds need to come together, because when they do, the converged solutions drives greater return on investment (ROI) for advertisers. Advertiser spending follows results, and the best results come from using a cross section of screens, which is why converged advertising is something that we’re all going to be hearing a lot more about in the coming years. The results are in the data, and the results are in.

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