Premium video consumption is splintering across platforms and services, creating huge challenges for content providers seeking to optimize ad revenues. To address this problem, video ad tech provider Operative has launched a new industry-wide initiative called “Premium at Scale” which aims to enable converged ad buying across linear and digital, based on business outcomes and audiences.
Operative’s CEO Lorne Brown told me in a briefing that Premium at Scale is an open, interoperable framework that will integrate media companies’ existing ad tech stacks as requested. Operative aims to play a central role in streamlining this process, helping transform TV from linear and digital silos to a platform model that will better compete with Google and Facebook.
A critical challenge facing video providers is how to balance distribution of their content on platforms vs. on their owned & operated properties. At the recent VideoNuze Online Video Ad Summit, we dug deeply into this topic in a session featuring Trevor Fellows (EVP, Digital Sales and Partnerships, NBCUniversal), Paul Kontonis (Chief Marketing Officer, WHOSAY Viacom), Blake Sabatinelli (CEO, Newsy E.W. Scripps) with Lorne Brown (CEO, Operative) moderating.
Each of the panelists did an excellent job articulating the specific benefits they seek out in platform deals such as incremental reach, enhanced branding and stronger monetization. They talk about how platform distribution deals work and why advertising is central, the role of data and demographic fit, why producing compelling, premium content is paramount, how they choose to allocate finite resources among various platforms and why scale matters so much, among other topics.
For anyone considering how to monetize video everywhere, while maintaining a strong O&O presence, the session is really valuable.
Operative has officially launched Operative Compete, a SaaS platform for publishers to centrally manage all of their programmatic partners. Operative Compete works for display and video inventory and across header bidding and waterfall set-ups. A beta version of Operative Compete has been in use by Outdoor Channel, Rolling Stone, Us Weekly, Nasdaq and Meredith Corporation.
Programmatic is becoming a bigger part of the advertising landscape, with eMarketer forecasting that $25.2 billion, or 73% of all U.S. display and video advertising will be transacted programmatically in 2016, rising to $37.9 billion, or 82% of spending, in 2018. eMarketer cites two reasons for the surge in programmatic: buyers’ and sellers’ increased comfort using automation and technology to transact, and increasing demand for audience-driven buying.
One of the most interesting panel discussions at the recent Video Ad Summit was “Reaching Audiences at Scale: Will TV Succeed in the Digital Age?” which included Adam Gerber (SVP, Client Development & Communications, ABC), Mike Germano (Chief Digital Officer, VICE Media), Melissa Kihara (Global VP of TV & Video Products, Xaxis), Bob Toohey (President, Verizon Digital Media Services) and Lorne Brown (Founder and CEO, Operative) moderating.
It’s no secret that video viewing is fragmenting and linear TV is declining as new video sources proliferate and behaviors change. Still, TV networks are running fast, distributing programs in new ways, investing heavily in data to better enable targeting by advertisers and leveraging social media to better engage viewers.
As Adam pointed out, research suggests that scale in long-form ad-supported online viewing is dominated by TV networks. But as he also pointed out, scale in data and audiences is dominated by platforms like Facebook and Google. This is one of the key sources of tension for advertisers - how to combine the best of both, to achieve scaled, targeted, efficient, effective, trusted advertising in premium video?
The panelists agreed that for lots of reasons the market is nowhere close to reaching this nirvana state. They explored all the reasons why, along with things that are being done to move the ball forward. For anyone trying to better understand how TV is evolving in the digital age and what role it will play, it’s a fascinating discussion.
Watch the video now (39 minutes, 48 seconds).
With video and TV viewing fragmenting across numerous devices, services and apps, advertisers are more challenged than ever to efficiently build holistic, measurable TV ad campaigns. That has created a big opening for major platforms like Google/YouTube, Facebook and others to differentiate themselves with single source, in-depth user data that can be mined for targeted campaigns across their massive audiences.
Concerned by these dynamics and the precedent of how platforms seized ad dollars from print publishers, NAB Show is seeking to play a leadership role, forming a new digital committee including executives from TV networks, pay-TV operators and TV station owners. The committee, headed by Lorne Brown, Founder and CEO of Operative, a leading video ad tech provider, held its first invite-only meeting a few weeks ago at the NAB Show.
TV programmers like Viacom and AMC are in the same position that print companies like The New York Times and Conde Nast were ten years ago. As consumers moved to reading content online, the legacy publishing companies figured they could replicate their business on a new channel. No one could believe that a tech company with no real content could compete for brand advertising budgets. We all know how that played out.
Now, consumers are cutting the cord and moving to digital channels to watch TV. There is more to lose on both the buy and sell side during this time around. TV advertising is considered by advertisers to be the holy grail of inventory, and they don’t want to lose it any more than the TV companies do. However, the siren song of audiences at scale and with technical ease could change their minds.
In the hierarchy of important metrics for video publishers, GRPs reign supreme, followed by impressions. From an advertiser perspective, using these two metrics makes it hard to compare performance across these two similar channels. Many large media companies are also grappling with how to reconcile GRPs and impressions, particularly when they try to build cross-channel media plans for their advertiser partners.
The biggest problem with GRPs and impressions is that they encourage spending on volume instead of value. While everyone knows that a brand wants to reach a desired audience with a particular frequency, when translated into GRPs or impressions, there are perverse monetary incentives to ignore those guidelines and go for volume instead.
These are complicated times for video content providers, with more opportunities to monetize their video inventory and partner with advertisers, yet more complexity as well. How to succeed in this rapidly evolving environment was the topic of our Video Ad Summit panel, “Modernizing the Monetization of Video: The Content Provider’s Perspective.”
The session included Lorne Brown (Founder & CEO, Operative), Sean Holzman (Chief Digital Revenue Officer, Bonnier), Stephano Kim (SVP, Ad Operations & Chief Digital Strategist, Turner Broadcasting), David Morris (Chief Revenue Officer, CBS Interactive) and Lisa Valentino (Chief Revenue Officer, Conde Nast Entertainment), with Tom Herman (CEO, DashBid) moderating.
The wide-ranging discussion touched on various topics including how campaign success metrics are changing, why performance and engagement are paramount, how content providers are creating their own data management platforms and selectively exposing their first-party data, why the consumer is really in the driver’s seat, the role of branded entertainment, the challenges of moving to a direct-to-consumer approach at scale, ad-blocking and much, much more.
Capitalizing on video's tremendous monetization potential has become a top priority for all content providers, as evidenced by the biggest-ever NewFronts, which kick off today. But newly released survey results highlight how some content providers are already better positioned than others to actually profit from video advertising.
Ad tech provider Operative provided me with a cut of data from a new benchmarking survey it released last week, evaluating the correlations between video ad sales/operational effectiveness and profitability. The overall survey, done in partnership with Digital Content Next, provides insights into 194 content providers, with the cut I received focusing on the 70 content providers that generate at least 25% of their online billable revenues from video.