Will TV-Like Ad Experience be Key for Online Video’s Success?

If money follows time, then as consumers shift their viewing to mobile devices, advertising share shifts away from TV and toward the new premium-video online ecosystem.

As that shift starts to happen — and it already has — online video companies will have to create new revenue opportunities. One such opportunity, yet to be fully realized: the ability to run several real-time bidded ads in a sequence, similar to a TV commercial break. In some circles, this is called a pod.

Pods allow for online publishers to increase their ad load, which create more impressions without needing to increase the number of viewers or content streams played. Even more important, pods allow publishers to replicate TV ad behavior and ad rates by accommodating any sequential combination of video ads within an on-demand or live broadcast.

For instance, within a pod there are multiple slots, or opportunities to show a video ad. Traditionally, all ad slots in the pod are pre-determined and provided at once in a single response. An ad pod that performs real-time auctioning for each slot within has a number of distinct advantages, including:

•       More dynamic: the pod is more flexible, performing any number of auctions within the time allotted instead of a predetermined number of ads, allowing more competition for each ad within.
•       Yield optimization: with an auction, competition drives higher cpms for each ad opportunity within the pod, maximizing revenue for publishers.
•       Conflict avoidance: the problems of repeating ads or showing ads from competing brands within the same pod can be avoided.

Ultimately, RTB-enabled pods would represent a logical progression for the online video industry. This has the potential to open up new monetization opportunities for publishers and more pricing options for advertisers. Of course, get it wrong — and audiences will be alienated, and advertisers will become wary.

It’s no big secret either that TV buyers are looking for TV-like buying mechanics in online video, to allow them to plan their linear TV campaigns and online video campaigns in the same way. According to Bloomberg, the new ad product Facebook is rumored to be launching on its platform will aim for broadcast-like mass reach  — as opposed to the rest of its inventory, which is micro-targeted — wooing TV ad buyers with spots reportedly set to cost between $1 million and $2.5 million.

And, as if any more proof were necessary, Adobe’s 2012 Video Advertising Report found that mid-roll video ads, which are more like a traditional TV commercial break, held the most engaging commercial position, with an 87% completion rate performing close to 30% better than pre-rolls.

All of this demonstrates that viewers are engaged by a more TV-like ad experience online — and that the opportunity for RTB ad ”podding” may be upon us.

by Andrei Dunca
Andrei Dunca is chief technology officer and co-founder of LiveRail. In this role, Andrei oversees the design and implementation of LiveRail’s technology stack, products, and infrastructure.
Courtesy of MediaPost