The State of Video Advertising

The online advertising industry is going through so many changes, it’s hard to keep up. But there are two trends that take center stage, given their incredible growth: video advertising and programmatic marketing.

Online video has flexed its marketing muscle, delivering such stellar brand and performance lift that it has earned a permanent place in the marketer’s budget. With 80 percent of all Internet users able to recall watching a video in the past 30 days – and 46 percent claiming they took some action after viewing the ad – we can expect video advertising to dominate (according to the Online Publishers Association).

Programmatic marketing is the other force, with some 19 percent of all display media purchased via real-time bidding (RTB). As of late, programmatic has been creeping into spheres outside of display, including mobile, video, and even guaranteed campaigns. With technology that can, in real time, optimize the context in which an ad appears – and personalize the creative based on the user – programmatic marketing is nothing short of a godsend for marketers who are under pressure to deliver measurable return on ad spend (ROAS).

Recently I caught up with Tal Chalozin, CTO and co-founder of interactive video advertising technology provider, Innovid. Tal guides technology development and implementation, product creation, and business development activities across the company. We chatted about how he sees the video industry growing, as well as where we can expect it to intersect with the programmatic world.

Julie Ginches: Let’s start with the biggest question: budget. How are marketers funding their digital video ad spend? Are they taking it from TV? Other advertising mediums? Or are they diverting it from other digital channels?

Tal Chalozin: It’s a two-step evolution. At first, online video emerged from the online space, living on websites, consumed on a desktop, and measured (and bought) with digital currency. As such, online video was driven by the digital team and lumped into the digital budget.

At the same time, the TV market underwent radical changes. Once upon a time TV was very centralized, with just a few national channels and lots of local broadcasters, which meant marketers were guaranteed to reach an audience. Naturally, TV received the lion’s share of their budget. It was effective.

But today, the TV market is highly fragmented. In addition to sitting in front of the television set in our living rooms, we consume content online, on-demand, on iPads, and on connected TVs. We can choose between hundreds of channels, not a handful. Time of day no longer rules. All this adds up to a new reality where the line between TV and digital is very blurry. I expect that marketers will react to the new reality in the near future by funding digital video out of their television budgets.

JG: Programmatic and video are two growing and converging trends. Do you think marketers understand the power of programmatic as it pertains to video/upper funnel campaigns?

TC: The foundation laid by programmatic buying in the display space has certainly helped the video space grow.

In the current premium publisher space, videos appear on certain publisher pages that are guaranteed to have a certain type of content and audience demographic. For an awareness campaign, these guarantees can be beneficial, although at times the available inventory can be scarce. Programmatic video overcomes scarcity by bringing video ads to consumers on a vast array of websites, and advertisers to target specific audiences by content channels and specific publishers. Marketers used to be hesitant toward programmatic buying because there were no guarantees for brand-safe content, but verification technology and transparent reporting has overcome that issue.

I’m a great believer in the power of technology and I’m sure that in the future, every manual process will be optimized and enhanced by technology. This will eventually include all media channels and devices.

JG: Have programmatic buyers of video embraced interactive video? Why or why not?

TC: Programmatic buyers are driven by efficiency, and for the most part, define success by the number of particular actions taken by the consumer. Given this, interactive video is the best tool to increase engagement and ultimately, purchases.

Marketers seeking high-impact vehicles have traditionally turned to TV, but now have several options for an engaging video experience. Once you add interactivity to video, there is a major boost in time spent, engagement, and higher transactions – all encapsulated with one creative element.

JG: You mention metrics. Let’s talk about viewability. As you know, the IAB is currently in the process of defining what viewability means as it pertains to video advertising. What is the level of advertiser comfort, or awareness around the topic of viewability – as it pertains to video?

TC: In my experience, advertisers are always interested in seeing more detailed analytics so that they can optimize and justify their spending accordingly. We’re seeing great awareness and demand for advanced measurements in the video space and with that, a need for a more accountable currency.

There has been a spotlight on the IAB’s work with the MMMS task force to define what a viewable video impression entails, which is a true testament for the advertising industry’s advocacy.

Since digital video comes in many shapes and forms (original content that has the same quality as major primetime TV, short clips, video that is adjacent to text content, or even – heaven forbid – in-banner), advertisers see viewability as a way to qualify media quality.

JG: As programmatic video evolves to the next level and embraces mobile video and TV screens, how will interactive video evolve with it?

TC: In lock, stock, and smoking barrel! We’ve always said there’s no such thing as mobile video, online video, or smart-TV video; and that those screens are merely portals to consume content. In the same way that consumers expect their content to travel seamlessly, ads are acting much in the same way. Interactive video is following the same rules by being delivered through different devices seamlessly.