We are in the midst of a revival for video marketing: consumer preferences are changing, we can no longer rely on cookies, and technology is changing the relationships between buyers and sellers. It’s the perfect time to reevaluate everything from the foundation up and determine the best path forward.
Speaking at our #FutureofVideo breakfast series in London earlier this year, SpotX’s Chief Scientist Neal Richter said this is a positive evolution. “One of the opportunities we have here is to look at the bones of marketing strategy and decide how to reach an audience, what’s the best message for that audience, how should I think about the audience, and what data do I need to address that audience,” he said.
With that in mind, we looked to understand the future of online video advertising and the browser experience from the perspective of publishers, buyers, and ad tech providers.
The evolution of the browser and content consumption
Much has changed with how people choose to consume video content, largely driven by the massive amount of choice consumers have in selecting what they want to watch. In the UK, 50% of households use a subscription video on demand (SVOD) service, and 25% subscribe to more than one, according to Beeswax. The hesitance consumers had even just a year ago to adopt new forms of content has largely evaporated.
Interestingly, consumers aren’t limiting themselves to one form of content, either. Discovery has seen a surge in dual-screening, where viewers may be watching a film on the big screen while simultaneously using their phone or tablet to search for related content.
All of this choice means consumers won’t settle for anything less than a clean, enjoyable experience — no matter the device. The consumer experience must remain a top priority.
This is particularly pertinent in browser-based environments where there’s been a resounding cry for websites to clean up. Sites are overloaded both with tech and with ad units. To improve the experience while still connecting advertisers to consumers, publishers must reduce the amount of code on a page, implement fewer ad units, and shift to higher quality units, such as video.
Alex Hodge, Director of Ad Sales and Programmatic at Discovery, made the distinction that Discovery is fully in the content business. While monetization strategies are important, ultimately, publishers can only make revenue if users come to the site and stay on it. Their experience on the site is of the utmost importance, and publishers must remember users are coming for the content, not to be bombarded with ads.
Both publishers and advertisers need to shift their focus more to the video content itself, and less so on which device it’s delivered to. Cadi Jones, Commercial Director EMEA at Beeswax, said, “Advertisers want to reach [consumers] wherever they are around that emotive, quality programming — whether that’s on a TV set, or on their mobile, or on a laptop or tablet. We think about video as a mechanism for delivering that quality exposure for brands and much less about the device.”
Opportunities for the post-cookie world
It’s a huge change to see cookies going away as they’ve been at the center of everything and are really the base of programmatic in browser environments. The way we’ve transacted for the past 10 years is going to have to change. “In the times of real challenge, there are real opportunities,” said Jones.
Users hate the retargeting enabled by cookies, so this is a win for them. But, they also hate seeing the same ad over and over. At the very least, advertisers need to control frequency, and while that will be very achievable through other means, today in many cases this still relies on cookies.
There will be many new challenges for the buy-side. All view-through conversions will disappear without cookies, so how will measurement and attribution change? Already, there are many different attribution models from which to choose, and most are flawed in some way. It’s time for a larger conversation about how to truly evaluate performance and standardise on video metrics.
SSPs have also shared data around how much more likely DSPs are to bid when there is a matched user — up to 90% — which demonstrates the potential effect of losing cookies. Advanced publishers have already started thinking about the best path forward, and SSPs are determining how they can better support their publishers.
The rising value of first-party data and contextual targeting’s resurgence
Without cookies, first-party data is even more important. Many premium publishers rely on logged-in, known users. But there are a great number of other publishers that must determine how to extract value from the anonymous web. This is where we’ll see the growth of contextual targeting, particularly as privacy concerns increase.
Advertisers will likely focus more on the awareness piece of campaigns, rather than direct sales. They’ll need to look to align their brands with the right sites. Fern Potter, former Managing Director UK at Neo Media World, explained, “Because of brand safety and suitability, context never really went away, but audience and data was layered on top.” Brand safety initiatives will have to evolve as well, and brands will need to determine how to extend contextual strategies to gaming, video streaming, content partnerships, and so on.
Publishers without logged-in users need to work quickly to monetise their content. They have an opportunity to help buyers use content as a proxy to discover an audience. Many are starting to look at how content or engagement can map to various audience segments, and then using that to create more curated or private marketplaces (PMPs) for inventory.
A new emphasis on relationships and programmatic deals
With the demise of cookies, the industry is going to face a large shift from highly scalable third-party data activations to transacting on smaller-scale audiences driven by first-party data. Relationships will be so much more important as more buyers look to work directly with SSPs or publishers.
Publishers will need to offer their inventory through PMPs or curated marketplaces that cater specifically to brands’ needs. Ad buys will become more product-led, said Potter. For example, if a car brand is launching a new family car, vertical data sets that target the niche audiences the car brand wants to reach become very valuable, and offering them gives publishers a competitive advantage.
Still, scale always wins, said Hodge. It’s a challenge to efficiently scale loads of small direct deals, plus there’s still a question of how to standardise first-party audiences. We can expect to see more aggregation and alliances throughout the industry where multiple parties partner to share IDs and logged-in audience data to create scale.
While buyers have been trained on scale, it’s important to consider the attention piece as well, said Potter. Advertisers need to be smarter about relating to the consumer’s state of mind when it comes to building performance and brand equity. Going back to the car brand, contextual targeting again comes into play as the brand may look to appear within family content to maintain relevance between its family car product and the state of mind of its target audience.
We’re now at the beginning of a period of massive transition. Initiatives are already underway throughout the video ecosystem, but there’s still more work to be done to capitalise on the emerging opportunities. It’s an exciting time to shape the future of online video!