Fast video growth demands efficiency

Imagine doing the morning coffee run, but, instead of putting in one order for the whole office, one person takes orders for lattes, another for cappuccinos, and yet another for long blacks. Quite inefficient, isn’t it?

A singular coffee order is common sense, one would think.

Online advertising, for all its potential as an efficient marketing vehicle, has been ruled by companies and point solutions sometimes creating greater inefficiencies. Buying and planning television is quite easy, yet, in online, buying and planning video have become siloed and divided off into different groups and technologies.

Even content has begun to get even harder to understand, with every year seeing the definition of each delivery platform becoming slightly harder to define. For example, what’s the difference between a time-shifted TV show that’s been taken off air and stored on a hard drive, versus one that’s replayed and streamed across the internet? One would think there wasn’t any difference, yet advertising for that same piece of content is sold by different people for different people.

In fact, less than a third of the respondents to the inaugural State of Industry Report buy video through a cross-platform group. The rest tend to operate in siloes, with the TV folk buying TV and the digital group buying online. That said, habits are changing and there does seem to be widespread recognition that the process needs to change to reflect the cross-screen future.

Perhaps that will also mean a gradual move to more sales through trading desks and ad networks. Three-quarters of respondents to the survey said they buy, at least in part, direct from a publisher. In the most recent comparable study in the US, that figure has fallen from 78% in 2011 to 52% in 2012.

This shift reflects the demand for cohesive campaigns, across platforms. To do that effectively, you need access to available inventory, with comparable metrics.

The upshot should be more effective campaigns, yet publishers often read it as a blight on their yield management. If they sell direct they can ensure they get the best return on their inventory.

But, I wonder if that’s the case. The best yield will come from inventory that reaches the right audience at the right time. Hiding that inventory in your own closed world could encourage advertisers to look elsewhere.

In fact, the report shows publishers are doing well when it comes to yield. Their CPM, on average, has increased 16% over the last year, along with a 31% increase in inventory.

Every Christmas and birthday floods the consumer market with more tablets and connected TVs, broadening the opportunity for online video. The demand is there, the yield is strong and publishers and agencies alike need to consider the most efficient way of meeting the demands of advertisers – integrated campaigns, closely targeted and delivered in a timely manner.

Phil Duffield is managing director at Adap.tv.

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