Video Advertising Trends for 2012

This morning I went to an event organised by interactive video advertising company Brainient, on the topic of Video Advertising Trends for 2012. Here are my notes, which I thought would be useful to share here:

Sorosh Tavakoli, Founder and CEO, Videoplaza

Videoplaza apparently raised $12 million for its multiscreen ad sharing platform just yesterday. The founder spoke about the following themes in video advertising:

a) Audiences will be cross-platform: they are no longer just via the TV, but use the mobile, tablet, PC, all in very different ways

b) Trading will be automated and sophisticated: agencies will need to have a buy-side and a sell-side strategy. The audience (considering a majority of them will be hard-core fans) for a show like Desperate Housewives may be willing to sit through 2 or 3 pre-rolls before a show, but the audience for something like the X-Factor will not. (In my own experience, if it counts for anything, this is true. I remember sitting through plenty of pre-rolls when Hulu launched in the US because I just had to watch Arrested Development).

c) The advertising ecosystem will be polarized: Traditionally, advertising is heavily skewed towards TV (to put it in perspective, global ad spend on TV was $160 billion, compared to $4 billion for online in 2011. Mr. Tavakoli is of the opinion that this split will change with the rise of mobile use, tablets, and of course connected TV. He says people by nature don’t really want to watch their favourite shows on linear TV (for example, at 8pm on a Wednesday) – they want to be able to watch it when they want to and they have this option with digital.

Paul Wright, Chief Digital Officer, OMD UK

Paul gave the audience a view of how an agency deals with clients in digital and how they are open to trying any new technology that makes sense for their clients. He said clients are pretty smart, they know how many people they can reach with digital but equally they know that TV is important as well. Also, he said OMD gets calls from media owners – up to 50 a day! – and none of them realise that they may just not be right for OMD’s clients.

He also said that depending on who the client is, their digital strategy may be weighted towards content or context. McDonald’s for example are more keen on building the brand online, whereas for someone like EasyJet obviously click-throughs and actual sales are much more important.

He said that despite the reach of TV currently being so much more than digital, digital was much more complex; OMD work with 265 different platforms in digital (where various Google and Facebook platforms are counted as one each), compared to 4 in TV. OMD apparently use econometric models to improve their work in digital. They use technology to reduce duplication and avoid buyers sourcing inventory from the same place. They don’t believe in Last Click Attribution, where people are bombarded with the same messaging till they finally click through and then the media owner is rewarded for that. They are more keen on providing the right content. He said that data is absolutely important but for an agency the question is how to make best use of the client data, not just audience data.

The video market is increasingly becoming more complex:

a) Broadcasters (ITV, BBC, Channel 4 etc.)

b) Portals (Google, MSN etc.)

c) Video publishers (Videojug etc.)

d) Online publishers (Times Online, Cosmopolitan, Metro etc.)

e) Gaming (Miniclip etc.)

f) UGC (Facebook, YouTube etc.)

g) Video technology platforms like Tremor Video

h) Video exchanges like SpotXChange

i) Demand Side Platforms (DSPs) like Tube Mogul

Clients are happy with re-formatting their TV ads into pre-rolls as it doesn’t require them to reinvent the whole ad. Increasingly they will pay more attention to digital for the quality of interaction: they’ll want to know if people are watching whole ads vs. skipping after a few seconds and so on. OMD is testing content that helps them work better, and so open to anything. They are technology-agnostic, and currently testing DSPs. They’re also paying attention to people’s perception of ads to make sure the right content is being served.

In case you didn’t know, Google is apparently launching their own BARB-like audience panel this year. I did some research and found more about this on the ISBA site, if you’re interested:

Google is funding a multi-million-pound planning tool to help brands understand consumer behaviour across TV and online media. The internet giant is working with WPP-owned research firm Kantar to build a panel that will measure TV and online media habits from a single source.

Kantar will recruit a 3,000-strong panel, representative of the UK population, by the end of 2011, with data and measurement analysis promised to the industry by 2012. The aim is to provide brands with a planning tool where they can benchmark the reach and footprint of a campaign that would run across TV and online. It aims to help them understand how leveraging spend between TV and the web can impact consumer interaction through a single source, rather than by fusing together two sets of data.

Google has discussed its initiative with all of the UK’s major trade bodies involved in media measurement including the IPA, the IAB, ISBA, BARB and UKOM. It will look at how its initiative will complement others, such as the IPA’s Touchpoints.

Paul Wright concluded with what he thinks 2012 will be about for digital advertising:

1. Quality content

2. Well-targeted audiences

3. Use of technology to make buying efficient

4. Proof of effectiveness

Maria Cadbury, General Manager, Adconion UK

She spoke about Adconion’s proprietary technology. Adconion is an independent global audience and video content network.

Emi Gal, CEO, Brainient

He spoke about the rising importance of interactivity in video ads: interactive pre-rolls generate 300% higher CTR than non-interactive ones. With technologies like Zeebox, he mentioned that it will be possible to build interactive ads into apps, and drive sales. Brainient is working with clients like ASOS to implement interactive ads on their site. Zappos, for example, saw a 30% increase in sales by putting videos on product pages.

All in all, some food for thought here and there for people working in the media industry, especially digital.

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