I spent the last weekend with a group of about 30 of the top leaders of the video industry at the Beet.TV retreat in Vieques, Puerto Rico. The Beet TV organizers put on a stellar event, which provided a rare opportunity for some open and candid conversations with different companies in the video space.
As part of the Outstream Panel, the moderator Ashley Schwartz asked me about the growth of this market, and if I expect it to go through a similar path as the native advertising/content recommendation market created by Outbrain and Taboola. I often think about those two companies, and am very impressed by the market that they created from scratch. They introduced an entirely new format, and new revenue stream for publishers that does not compete with their current ad placements and were able to get advertisers to create strategies specifically for this new ‘native’ marketplace. Ashley was questioning if the large investments and financial commitments in content recommendation are also making their way to outstream?
My take is that what is happening with the Outbrain and Taboola content recommendation formats, while impressive, does not equate with the development of the outstream space for several reasons. First, it is important to note that the video demand pipes are already in place, and we can assume some liquidity on the demand side here. Instead of connecting demand to supply, the primary goal in the outstream space should be to manage the user experience in the most effective way possible, as the formats themselves have a much bigger impact on the user. Also, unlike the text+image of native or the pre-defined sizes of rich media which require constant resizing, outstream video provides a tremendous amount of flexibility in terms of the format size.
The fact that some companies try and block competition by providing exclusive or highly lucrative short-term financial commitments to publishers does not necessarily bode well for the long-term of the industry. Publishers need more than just immediate financial commitments. Don’t get me wrong – ultimately we are here to help publishers maximize their ROI. But in order to do so, they need the tools to evaluate the impact of these outstream formats on their overall (long-term) revenue as well as the user experience.
Publishers should evaluate the new outstream formats carefully. If done right, they offer a tremendous opportunity. Vendors need to take responsibility and provide publishers with tools to manage and understand what works best for their users. Instead of pushing yet another tag for a check that helps them only in the short-term, publishers should take advantage of platforms that let them understand the impact of these new outstream formats on the user, and then build a strategy to help them increase long-term revenue in 60/90 and even 365 days.
Originally posted on LinkedIn Pulse.