How to Get the Most Out of Online Video Advertising

How to Get the Most
Out of Online Video Advertising
The internet has changed TV forever. What was once a one-to-many broadcast is now
a one-to-one personalized experience. Not only that, consumers expect to be able to
watch their favorite teams, shows, concerts, and more on any device, no matter where
they are or when they’re tuning in. This creates complexity for both publishers and
advertisers, but also tremendous opportunities. So how do you reach consumers with
your brand message in this new world of digital TV? And how do you match up the
right content with the right ads with the right audience to increase engagement and
drive up your CPMs?
This whitepaper aims to make sense of the changing online video and advertising landscape, and provide tips for how
to use technology and data to drive meaningful results.
As the adoption of smartphone and tablets skyrockets,
the demand for video on these devices also accelerates.
In fact, mobile and tablet video plays have more than
doubled year-over-year for the past two years.1 No longer
constrained to anchored devices, consumers are watching
video everywhere — on a smartphone, tablet, set-top box,
game console, or smart TV.
With this explosion of video on multiple devices, online
video advertising is also experiencing rapid growth.
Online video ad spend in the United States reached
$2.9 billion in 2012 with a projected compound annual
growth rate (CAGR) of 26% by 2017.2 This growth
in online video advertising spend has also spawned
a growth in the technology supporting this industry.
Programmatic advertising —
the use of software, algorithms, and rules to automate
the delivery of video advertising — continues to gain
Source: Ooyala Q3 2013 Global Video Index
Source: eMarketer, Aug 2013
U.S. Digital Video Ad Spending, 2011–2017
Digital video ad spending (billions)
% change
adoption. In particular, the adoption of real-time
bidding (RTB) is expected to grow rapidly. RTB spend
in the US reached $402 million in 2012 and is projected
to grow at a 57% CAGR through the end of 2014.3
Source: eMarketer, Aug 2013
How to Get the Most Out of Online Video Advertising
By the end of 2013, 6% of the global population
owned a tablet, while 22% owned a smartphone.
To give perspective, the smartphone penetration
number represents an increase of nearly 1.3 billion
smartphones in the past four years.
The length and type of video also matters. Among the
different types of content available on varying devices,
live video and long-form video lead in the explosion of
multi-platform video.
The growth in mobile and tablet adoption has
corresponded with a significant growth in mobile and
tablet viewing. In fact, the share of mobile and tablet
video views has grown by 133% in the past two years,
and we expect this trend to continue in 2014 and in the
years to come.1
For advertisers, the question is, “are these highly
engaged audiences worth more to you and your
brand?” The answer may be that it depends, but if
you’re looking to reach a specific audience multiple
times in one viewing session, live and long-form
video provide the best opportunity to deliver multiple
campaign messages and increase brand recognition.
Mobile ad spending is also expected to grow. By 2017,
mobile is expected to account for 15.8% of all ad
spending, or approximately $31.1 billion. Mobile ad
spending is expected to grow by 48% over the next
five years, which by far outpaces the projected growth
rates for traditional TV and digital advertising at 3% and
11%, respectively.2
For publishers, live and long-form present an
opportunity to deliver more targeted ads at a higher
CPM by capitalizing on very engaged audiences.
For some clients, we’ve seen a nominal drop in
engagement for a significant lift (5–10x) in the number
of ads and corresponding ad revenue.
In addition to knowing the device on which your
viewers are watching, it’s also important to understand
when they are watching. Did you know that mobile
and tablet viewing spikes early in the morning and
through commuting hours, while PC video plays peak
midday? Or that tablets become the “first screen”
on the weekends, while PC views dip significantly?
This information is critical for publishers who want to
promote a trending video and for advertisers who want
to target their campaigns as precisely as possible.
Adding Midrolls
+10X ad opportunities
-7% viewers
+930% revenue
% of viewers
Watched 1/4
Pre-rolls only
Watched 3/4
Finished Video
Source: Ooyala customer data
Video Plays by Time of Day
Knowing which devices to target, and when, can increase your views and improve the likelihood your ad will hit the mark.
% of Maximum Mobile Viewers
6AM 12PM 6PM 12AM 6AM 12PM 6PM 12AM 6AM 12PM 6PM 12AM 6AM 12PM 6PM 12AM 6AM 12PM 6PM 12AM 6AM 12PM 6PM 12AM 6AM 12PM 6PM
Source: Ooyala customer data
Source: Ooyala Q3 2013 Global Video Index
Source: eMarketer, Aug 2013
How to Get the Most Out of Online Video Advertising
A technology platform can also provide the
transparency and data required for more targeted ads.
Having ads that match individual consumer interests
will result in higher engagement and reduce drop off
As more content is viewed across multiple platforms
and devices, managing the complexities of growing
ad inventories and the growing number of advertising
relationships is becoming essential. Publishers are
now aiming to connect to all major ad networks, DSPs,
trading desks, and exchanges. Optimally managing
inventory requires technology to help automate the
various rules and nuances unique to each ad buyer
relationship. Furthermore, access to all demand
relationships in a single centralized platform can help
populate an auction and drive competition for ad
inventory, thereby maximizing potential revenue.
Across the major video content categories — Arts and
Entertainment, Hobbies and Interests, and News —
there was a consistent trend that showed five types of
video advertising that performed best. For publishers,
having access to more advertisers means a higher
likelihood that you’ll be able to deliver high CPM ads
against your high-value content and get closer to
a 100% fill.
Ad Performance by Content Category
These five types of video ads perform best across the major video content categories.
Arts and Entertainment
Hobbies and Interests
Sum of Impressions
Business and Finance
Food and Beverage
Communications and Telecom
Source: LiveRail customer data
1. Study Your Audience
Publishers who understand their audience and offer
a better overall viewer experience are more likely
to attract new viewers and retain existing ones. Ads
are increasingly a key part of the video experience
and if a viewer is exposed to the same ad repeatedly
or presented with an ad that doesn’t match up with
their interests, it detracts from the overall viewing
experience. Publishers also need to understand their
viewer’s tolerance for ads and offer the appropriate
inventory to several buyers. Doing so will increase
the likelihood that the best performing type of ad is
delivered against the optimal content type, thereby
maximizing revenue creating the best possible viewer
In addition, the ability to track viewer engagement,
coupled with advancements in ad technology, means
that advertisers can be much more precise in how they
buy ads and how they reach their target audiences.
The more you know about your target audience — what
devices they watch on, when and for how long, what
shows are most popular, their tolerance for ads — the
better you can reach and influence them. Working with
a publisher and/or vendor that offers these types of
advanced video analytics will give you an advantage.
2. Strive to Be Everywhere
Consumers today watch video on multiple devices
throughout the day. Your ability to identify the most
important devices — whether they are iOS devices,
Android devices, Smart TVs, set-top boxes or game
consoles — and deliver an engaging experience on
those devices will determine your online video success.
From a technology standpoint, the more you can offload
How to Get the Most Out of Online Video Advertising
— ingestion, transcoding, delivery, app development,
ad insertion, or ad management — the more time
you have to focus on developing great content. For
advertisers, the proliferation of devices means having a
targeted, multi-channel strategy is now an imperative.
Your brand message needs to be visible in as many
places as possible if you hope to increase brand
recognition and customer retention.
3. Know the Data
Studies show that simply offering the ability to consume
content on multiple devices leads to greater customer
satisfaction,3 which in turn leads to reduced churn,
higher lifetime value of the subscriber, and lower
acquisition costs. The rapid adoption of mobile and
tablet usage brings new challenges and opportunities.
For publishers to capitalize on this trend, they need
robust analytics that provide insights into how people
are watching and on which type of device. In addition
to promoting the right content at the right time on the
right device, your ability to segment your viewers by
demographic and interest will enable you to attract
more buyers and generate higher CPMs.
4. Embrace Technology
Look for technology partners that will help you
capitalize on the recent growth of online video and
monetize this opportunity. Technology that provides
insight into your consumer’s interests and device
usage will enable you to deliver the most relevant and
appropriate advertising and enhance the overall viewing
experience. Programmatic advertising also provides
the highest potential in maximizing revenue generated
from video advertising placement. Lastly, the optimal
video monetization platform will increase the number
of potential advertisers within the publisher’s network
to better ensure the publisher’s advertising inventory is
filled to its highest capacity.
Source: Epix Survey, June 2013
It’s becoming increasingly clear that TV will soon be powered by the Internet and that the lines between broadcast and
online will blur. It might require different advertising strategies, but the opportunities and money are real. The world is
watching. Are you ready?
[email protected] 1-877-3-OOYALA
Ooyala harnesses the power of big data to help broadcasters, operators and media companies build more engaged audiences and monetize video with
personalized, interactive experiences for every screen. We go beyond traditional online video platforms, providing software and services combining bestof-breed technologies with industry-leading video analytics to help our customers optimize and automate video programming, streaming and syndication.
Some of the most successful and innovative media companies in the world—ESPN, Bloomberg, Telstra, NBC Universal, Univision, Comedy Central, VICE,
The Washington Post, Arsenal, Dell and more—rely on Ooyala.
[email protected] 1-415-512-7017
LiveRail is the leading publisher monetization platform for video with more than 5bn impressions (20% of all US video ads) delivered via its platform each
month. LiveRail provides premium publishers with the technology infrastructure to sell their video inventory smarter and safer, across all devices. Recently
recognized by Digiday Publishing Awards as the Best Monetization Technology for a Publisher, LiveRail is used by hundreds of major publishers who
benefit from sophisticated analytics, advanced controls and unparalleled transparency ultimately generating maximum yield for every ad impression.
How to Get the Most Out of Online Video Advertising