You need to care about digital video and its fragmentation, and here is why, says Mark Blair, vice president for video platform Brightcove.
Recently, The State of Industry video report was released with some fascinating results, not least of which was that advertisers total spend on digital video in Australia hit $196 million, up a massive 76 per cent on the prior reporting period.
The spend has shifted, according to the IAB, thanks to additional revenue that has been moved from the free-to-air TV, print and online display silos. It also suggested that budgets specifically for digital video advertising were going to increase by 37 per cent over the next year.
With all of that in mind, how is inventory going to cope with the influx of ad dollars? As it is, recent reports in the trade media have already flagged a dwindling supply of video inventory. So how and where should video be placed? And is this shortage of inventory a serious issue?
What the industry needs to do is take a good look at how devices around the TV are creating new digital video opportunities. These are the devices that are taking digital video usually reserved for the laptop or tablet screen, and placing them in the limelight on the home TV. They are currently underutilised or, worse still, not fully understood.
The devices in question here are those like Google’s Chromecast, Microsoft’s Xbox One, Sony’s Playstation 4, and now Smart TVs which come with built-in systems that open a portal to completely new content for the end user. LG and Samsung are particularly active in this space. In the US, the market for Smart TVs and other devices that connect to your TV to open up new content opportunities are far more developed than what we have in Australia. That’s a good sign that it’s a trend set to stay.
The tricky part is that there is no one system substantially more popular than the next, and some content options run across a number of systems but not all. This is not a case of iPhone 6 versus the rest, where one brand sticks out far above the others. Compromising the situation further is that certain ad serving solutions are not able to deliver the desired ad unit types to all target devices. But there is a solution.
You must first select an ad–serving solution based on your current and planned set of target devices and platforms. This means that you need to know whether the solution can deliver the desired ad unit types to all target devices. You therefore need to have a clear idea of the ad unit types your desired targets take. The target devices may have different platforms, programming languages for creating SDKs, video delivery protocols or cannot playback ads with a cloud based insertion platform
It can be hard to get an ad vendor to support less commonly used connected TV devices, but don’t look for the easy option — as we mentioned, the inventory is already hard to come by. Thanks to cloud-based ad insertion solutions, it is now possible to support all devices with a single deployment, as cloud–based solutions are device agnostic. Another advantage is that you can easily add a cloud-based solution to augment existing ad solutions. This, in turn, allows you to optimise new devices.
While devices like Apple TV, Chromecast and similar solutions are still finding their feet, let’s focus on the ones that are already there — Xbox One and PlayStation 4 — traditional gaming devices that are now offering up the same services as the Chromecast or Apple TV but with already massive audiences.
According to Gartner, revenue from video game consoles in 2015 is expected to be US$55 million, up from US$37.4 million in 2012. That is a lot of people who own and use consoles and are actively spending. Added to this, The Entertainment Software Association’s figures show that almost the same amount of women use video game consoles as men — it is no longer a single demographic. Finally, 50 per cent of console owners use their console to watch movies and 28 per cent use it to watch TV.
That all adds up to some very good reasons to invest the time in video advertising and explore your multi-device options, specifically in the connected TV space.