A Lot More Online Video; Now, How to Monetize It

Revenue from a favorite branding format for marketers–video advertising–is set to more than double from $7.77 billion this year to $14.38 billion in 2019, according to eMarketer.

It is no secret that audiences are increasingly accessing publisher content through their mobile devices. Mobile access is up 40% in the 12 months through July and comScore says it now accounts for 55% of total time spent on web properties, up from 42% two years ago.

And where audiences go, advertisers will follow. Today, over 20% of video views are happening on mobile devices, and that trend is growing quickly.

If video ad revenue is to really more than double in the next year or so, where will new supplies of video inventory come from? It is clear that “more YouTube views” alone will not do the trick. And the oft-maligned ‘in-banner’ video creates a poor user experience while failing to drive ROI for advertisers.

Yet, DoubleVerify data shows that nearly 50% of video ads bought programmatically are served in-banner. Suffice it to say that in-banner video ads continue to be bought and sold because there’s not enough quality inventory pre-roll available.

And we don’t have to time travel to know that the traditional pre-roll will not be the only contributor to the increase in video supply.

Mega-publishers such as Facebook realized the need to find better means for advertisers to interact with their mobile users. Marketers have responded positively to the way Facebook now counts and delivers its video ads.

However, the vast majority of publishers are at a distinct disadvantage against walled-garden sites such as Facebook as no other media outlet knows the full name, hometown, marital status, exercise habits, political opinions, and favorite movies, musicians, cars, retailers, restaurants, airlines, and electronics brands of hundreds of millions of people.

As a result, Facebook alone accounts for 1.4 billion monthly active users.

But, Facebook has also done something that will help everyone: they have gotten marketers comfortable with mobile as an effective video advertising channel. Its auto-play in-feed video ads across their service, have been well-received by users as well as marketers.

That’s given independent publishers the opportunity to do the same.

While Facebook can devote extensive resources to developing innovative video formats, most publishers do not have those R&D resources at their disposal. But, some publishers are becoming more proactive in implementing video units beyond pre-roll, such as outstream (video that “floats” between content blocks), which offers a better experience for both users and advertisers.

The Daily Mail, for example, will soon launch a new mobile-ad format to allow marketers to place auto-play video ads within content. High-impact larger ad formats give consumers a much better user experience and gives advertisers what they need in terms of higher impact, higher engagement creatives. Publishers will benefit from higher CPMs and ad quality – as brand spend opens up in response to the availability of larger, more impactful ad formats.

Advertising platforms that support payment and reporting by impressions served (and not ad requests) and full-screen ad formats, such as interstitial, go a long way towards providing a solution for viewability issues that are holding back digital ad growth on desktop and on mobile.

These platforms should also enable advertisers to test the relative value of different types of video units.

In the next couple of years, I expect continued growth of video by more budgets shifting from TV to digital, and more mobile video consumption.

Also within those bottom line numbers, we will see a big shift to more quality video inventory, but outside the pre-roll box, which has reached the saturation point. Innovation outside the box will pay off in a big way.

Originally featured on mediapost_logo2

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