In-Stream Video is Scarce; Video in Content Discovery is Next

Posted by

For all the industry buzz about the digital video opportunity, there remains one major piece missing from the puzzle.

The demand for video is clear: brands and agencies are set to double their video promotion budgets by 2019, and audiences will consume more video content online than via TV by 2020 (if not sooner). But there is not yet enough quality supply to satisfy either of these hungry stakeholders, whose appetites are growing by the day.

According to the latest report from eMarketer on the state of online video, this disconnect between supply and demand has left many brands and agencies with unspent money in their hands, waiting for an opportunity to promote their video content. This is guaranteed revenue for those publishers who can offer a safe, premium environment in which to run these campaigns.

Until recently, media buyers allocated the bulk of their digital video budgets towards traditional pre-roll advertisements, which mimic the 30-second TV spot. But these “in-stream” formats have always been constrained by the limited supply of existing online video content.

Following the rise of content discovery platforms like Taboola, publishers can now draw from the wealth of branded content that already exists across the web, using personalization technology to dynamically insert and recommend video on their own websites. Because these formats supplement the user experience, rather than disrupt it, we refer to the opportunity as “native video”—there are a number of benefits it offers over the exhausted playbook of in-stream.

Publishers can instantly unlock 3 to 6x more value from their existing audiences.

native video (1)

Video can be an expensive endeavor, especially for media companies with a history of high-quality editorial content. While it may not make sense for every publication to expand beyond text into original video, they can still benefit from the overarching trend without expensive investments in vertical expertise or production staff.

Native video offers a turnkey solution for publishers to instantly deliver personalized videos to their online audiences. These videos earn on average 3 to 6 times more than a display ad in the same placement, enabling publishers to significantly increase their revenue per mille (RPMs) and unlock more value from the same audience.

Native video favors high-quality storytelling and measurable engagement for advertisers.

native video (2)

Whereas in-stream ads succeed by stealing away a user’s attention, native video recommendations must earn the attention of a user, precisely because the format is opt-in. This creates an incentive for brands to create content that is valuable for the reader—telling a story rather than shouting a message.

Recent industry standards, set by the Interactive Advertising Bureau (IAB), further enable native videos to support interactive elements across both mobile and desktop placements. This is a major step forward in allowing brands to track engagement, rather than focus solely on impressions or targeting metrics (as our VP of Video described at length in his recent byline for AdExchanger).

The same eMarketer report finds that interactivity—such as overlays or calls-to-action—significantly improves campaign performance, and content discovery platforms can help personalize those messages for each viewer based on behavioral and contextual data.

These user actions provide marketers with a measurable and highly valuable metric that they can then optimize when allocating promotional budgets in the future.

Discovery platforms provide brand safety and viewability.

native video (3)

In recent months, social media and user generated content (UGC) platforms have come under fire for brand safety and measurement concerns. Major consumer companies like Verizon and Johnson & Johnson are the latest to suspend their advertising on YouTube, following concerns over their ads’ proximity to objectionable content on the site.

Content discovery platforms avoid these pitfalls by partnering directly with publishers, whose business relies on establishing trust with audiences through vetted and professionally-produced content.

Native video is also a high-viewability format, as it most often is delivered through larger placements that span the width of the main article container (on a desktop), or web page (on mobile). Industry research shows that these larger units earn upwards of 85% viewability rates, while smaller 300×250 banner placements are seen by less than 20% of page visitors.

Given how prevalent video has become in the digital media conversation—inspiring countless memes on Twitter—many of us could be mistaken for thinking it’s too late to act on the opportunity. But as the latest industry reports show, there is still significant upside to be realized for media companies who can offer an engaged audience within a safe and premium environment.

Advertisers and consumers alike are hungry for online video, and publishers no longer need to invest in expensive production teams to profit from this demand. By tapping into the power of content discovery, publishers can give both stakeholders what they desperately want, and more than double their revenues in the process.