In a spring 2015 trend report Business Insider stated that video ad revenue will double in just two years and reach nearly $5 billion in 2016, up from $2.8 billion in 2013. Consumers' engagement online, over multiple devices, increases daily. As the landscape for what exactly constitutes "TV" or "video" changes rapidly, advertisers are racing to keep up.
The constantly changing digital landscape makes it challenging for advertisers to make the most of video advertising opportunities. They must create a media plan across screens and formats with fractured audience data and a variety of pricing and metrics to compare. If they don't have a strong grasp of exactly what they're buying, it's nearly impossible to know if their budget was well spent. AsI've mentioned, even the difference between GRPs on TV and impressions online create a gap that hampers advertisers' abilities to optimize their media buys.
In this third "Ad Tech definitions post" I cover several of the terms associated with this new breed of TV and video advertising and discuss how they are relevant to publishers.
- Multisystem Operator (MSO) is an operator of multiple cable or direct-broadcast satellite television systems. Some of the big guys include Comcast, Charter Communications, Time Warner and Dish Network. Verizon has evenjoined the pack as a "virtual MSO" launching wireless TV and bundling cable TV channels. MSOs are a primary mechanism for advertisers to deliver multiscreen video experiences ad campaigns to consumers.
- Bundled TV Services used to be the only way that consumers could access multiple content networks. However, this landscape is changing on a daily basis with Verizon launching its virtual MSO (mentioned above) and providers like Apple, Roku and Netflix providing alternative subscription channels.
- Over the Top (OTT) refers to video, television and other services provided over the Internet rather than via a service provider's own dedicated, managed IPTV network. A recent report by The Diffusion Group showed that the growth of OTT programming is increasing at an incredibly fast pace while traditional TV is declining. This means that publishers will need to make sure that their advertising is optimized for OTT. This article by DIGIDAY is a great outline with supporting data surrounding the future of digital TV advertising.
- Addressable advertising technologies enable advertisers to selectively segment TV audiences and serve different ads or ad pods (groups of ads) within a common program or navigation screen. Segmentation can occur at geographic, demographic, behavioral and (in some cases) self-selected individual household levels, through cable, satellite and Internet Protocol television (IPTV) delivery systems and set-top boxes (STBs). (This definition was pulled directly fromGartner's IT Glossary). Since consumers are demanding (and responding to) relevancy, publishers must adopt addressable advertising to be able to compete for eyeballs.
- In-Stream Ads are ads that are served before (pre-roll), during (mid-roll) and after (post roll) within online videos. In-Stream Ads are similar to TV commercials where the video content stops while the ad plays.
- Video on Demand (VOD) is a service offered by several MSOs and services like Netflix where consumers can watch movies, TV shows and custom content when they want to, on almost any device. In addition, some MSOs like Comcast are offering VOD to brands directly which allows them to program their own network. In this medium, brands can develop long form content targeted at a specific demographic. Recent studies have shown that 76% of U.S. homes have a DVR, subscribe to a VOD service such as Netflix, or use VOD from an MSO.
- Dynamic Ad Insertion (DAI)is a technical process provided by some vendors to place ads within streaming and VOD content. Previously, advertising on this content was planned in advance and often included repeating ads or even broken ads. Now, with DAI, programmers can create a normal ad schedule for shows no matter when a consumer chooses to watch them.
- Spot Buying While most national TV advertising is bought ahead of time either during "Upfronts" or annual contract negotiations, a lot of targeted TV media is bought through "spot buying." Used by big advertisers throughout the year to fill out their plans as well as by advertisers who are local or with smaller budgets, spot buying it focuses on the more targeted local or network-specific inventory and allows for shorter more specific media buys.
- Programmatic Video Advertisingis video media buying on television that uses audience data to find targets in non-obvious ad placements to increase scale and save advertisers money. Using a combination of automated data analysis and manual spot buying, programmatic video is an example of a "hybrid" approach between linear TV and video media buying practices.
National TV advertising is still the biggest share of all video advertising by far, but with such quickly changing consumer behavior, changes to the market might be very swift. As TVs get hooked up to computers and even phones, consumers will come to expect 100% on-demand experiences. It's up to both media companies and advertisers to pave the way for the consumer experience to match their expectations, and that will only happen if TV and video start to embrace more similar terminology, media buying and targeting practices.
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