Demystifying the Digital Video Ecosystem
Written by: Cheryl Kellond
Monetization is critical to digital video growth. We’ve all seen stats about consumption and spend, like these from Forrester that say, with users consuming more online video than ever, marketers are set to spend more than $1 billion on online video advertising in 2010. The upwards trend for this consumption as well as ad spend is strongly on the side of premium content.
However, if publishers aren’t able to fully monetize their online audience they risk cannibalizing traditional TV revenues…−and the content consumers really want to watch will not be available online. For premium long-form content, the goal can be the same revenue load per show as television, but the ad experience to get there needs to be more engaging and diverse so as to not negatively impact viewership.
So if the goal is engaging viewers and growing viewership as well as making sure monetization efforts hit parity with traditional TV, where does a premium publisher start? What are the right first investments to make in order to build a profitable online video business?
Here’s how publishers are using the ecosystem.
Start with:
An ad platform for publishers
An advertising platform lays the foundation for monetizing online video. A good platform will be aligned with the direct sales model most premium publishers use and will help them:
- Boost ad load and revenue with a diversity of formats that will not hamper video consumption.
- Take player engineering out of the advertising equation.
- Empower sales with new ad experiences that attract new advertisers and help close larger deals.
- Accept third-party media buys.
- Provide deep engagement and interaction metrics – beyond basic ad server tracking – that support premium CPMs and guide optimization of the total consumer experience.
There is a catch, though. Such an ad platform can cause bottlenecks for publisher operation teams implementing the range of new experiences, campaigns, and advertisers delivered by the sales force. Therefore, there must also be a tool for ad fulfillment workflow that enables scale by eliminating errors and automating time-consuming steps including:
- Tracking all phases of ad fulfillment with an audit trail for all stakeholders
- Testing ad creative within live video player environments
- Automating preparation of complete ad packages for ad serving
Because an ad platform lays the groundwork that will allow for scale and profitability, it is the logical first step for a publisher’s digital video business.
Then add:
A video ad server
Video ad servers involve a complex array of functions, not the least of which is to categorize and target ads, account for media sales rights, handle business rules around revenue sharing and billing, and optimize video ad serving and inventory management. Ad servers do inventory forecasting as well as schedule the way ads are paced. An ad server reports basic data such as click-throughs, impressions, and other simple interactions.
Some publishers have such complex media sales and content syndication business rules that they need to start with a video ad server to manage them all. However, for most publishers optimizing video ad serving doesn’t make sense as a first step because optimization works better when there is ample ad supply and many advertisers on board, which is attained through an ad platform.
Implementing the ad platform first actually “primes the pump” for ad server migration by creating the inventory and the demand that can be optimized. The ad-platform-first approach is also best if the publisher’s goal is to start monetizing digital video quickly; ad server migration can take 6-12 months to implement and requires close involvement from a publisher’s inside team. Using an ad platform to drive new revenue opportunities can deliver results in a matter of weeks.
Final step (optional):
A video ad network
Once a publisher has the right ad platform in place, ad networks can be added easily without additional integration. Video ad networks can be helpful to premium publishers for filling the 5% or so of remnant (or “unforecastable”) inventory. For smaller publishers, ad networks can help with ad sales.
Panache has an industry-unique video ad platform that has been road tested with major media and entertainment companies as the way to make their digital video businesses profitable. We are a long-standing partner of thePlatform and have a tight integration with PDK 4.0, offering publishers the most robust solution on the market. To learn more about the Panache platform, visit their site or e-mail info@panachetech.com.
Cheryl Kellond is Executive Vice President at Panache.
Want to learn more?
Come see thePlatform CEO, Ian Blaine discuss advertising opportunities in the On-Demand space in a panel at NAB.
Tweet
Comments