Posts for 'Advertising'

Welcome to this week’s edition of Inside the Stream, the podcast where nScreenMedia’s Chief Analyst Colin Dixon and I take listeners inside the world of streaming video.

This week we’re pleased to have as our guest Alan Wolk, who is the Co-Founder and Chief Analyst at TV[R]EV and who is well-known to all of us in the industry. Alan has released a new report, “The Emerging Smart TV Ecosystem,” which is available for complimentary download and was underwritten by LG Ads, Samsung Ads and VIZIO.

In a nutshell, Alan believes smart TV makers “are having a moment.” A key part of our discussion is whether and how quickly smart TVs will supplant streaming sticks and boxes as the primary connected TV device. Alan also shares his predictions and assumptions for how quickly smart TV advertising will grow over the next several years. We also get into the crucial role of improved user interfaces, how the big 3 work with FAST services to attract and retain viewers, and where Amazon’s new Omnia smart TV fits in.

Smart TVs are helping reinvent the living room experience; hopefully our interview provides new insights for how they’re doing so and over what time period their impact will be felt.

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News yesterday that NBC has certain advertisers willing to pay a record price of up to $6.5 million for a 2022 Super Bowl spot, 18% higher than this year, and that it has fewer than five unsold 30-second spots remaining for February’s big game, brought to mind a newsletter I wrote way back in February, 2006 entitled “The $10 Million Super Bowl Ad?” (Unfortunately link no longer available). In it I asserted that Super Bowl ads would eventually command $10 million.

For reference, back in 2007 NBC sold spots in Super Bowl LXI for $2.5 million apiece. That means the price per spot has grown by an annual compounded rate of approximately 6.5%. That is 3.5x the rate of inflation over that 15 year period, which was approximately 1.9%. If Super Bowl ad rates continue to increase at an average of 6.5% per year, then the price will hit $10 million per spot in about 7 years, for the 2029 big game.

(Note, back in 2015, when NBC was charging $4.5 million per Super Bowl spot, NBC Sports Group’s EVP of Sales and Marketing Seth Winter said “$4.5 million is a steal. We think the Super Bowl is worth closer to $10 million in incremental exposure for marketers.” Worth it or not, 6 years later NBC believes a spot is now valued by the market at $6.5 million and to be fair some of the ads’ value is tied to a packaging approach NBC is taking with the 2022 Winter Olympics).

What’s going on here?

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(Reminder - if you are a listener of The VideoNuze Report podcast, please update your feed per below to the new Inside the Stream feeds which have been available for a couple of months....we don't want to lose you as a listener as we complete this transition!)

Welcome to this week’s edition of Inside the Stream, the podcast where nScreenMedia’s Chief Analyst Colin Dixon and I take listeners inside the world of streaming video.

Colin has just released an in-depth white paper on the free ad-supported streaming TV (“FAST”) market, underwritten by Verizon Media, and on today’s podcast he shares his key takeaways and assumptions (note, I have not yet had a chance myself to review the paper which is free to download).

The paper also includes Colin’s forecast for FAST services’ advertising revenues in the U.S. alone. Colin has built his model with both a top-down industry analysis and a bottoms-up review of FAST services including logging ad pod durations, frequency, fill rates, etc, and consulting with numerous industry leaders. Colin sees FASTs generating $2.1 billion in ad revenue in the U.S. in ’21, increasing to $4.1 billion in ’23, though he notes he may be erring on the conservative side.

If you’re interested in the FAST market and especially how it relates to AVOD, Colin’s paper is a must to download. Colin’s also eager to refine his model further, so please feel free to share your feedback directly with him.

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“There’s something happening here,
But what it is ain’t exactly clear…”
-Buffalo Springfield, “For What It’s Worth,” 1967

Late yesterday, Alphabet released its Q2 ’21 earnings. Included was the single snippet of financial information for YouTube that Alphabet began reporting a couple of years ago: “YouTube ads,” which represents YouTube’s global advertising revenue (non-ad revenue such as YouTube TV and YouTube Music subscriptions, etc. are not included). YouTube’s ad revenue for Q2 ’21 was $7.002 billion, which was 84% higher than the $3.81 billion Covid-affected Q2 ’20 ad revenue, and 94% higher than the $3.60 billion pre-Covid Q2 ’19 ad revenue.

Yes, Covid dampened Q2 '20 ad revenue, as management had previously said. But still, you read those numbers right. An 84% year-over-year increase. On a very large prior number.

Consider a little comparative context for YouTube's $7 billion quarter: YouTube’s ad business alone is nearly the size of Netflix’s entire global subscription business, which generated $7.34 billion in revenue in Q2 ’21. But two years ago, Netflix’s Q2 ’19 revenue was $4.92 billion, which means over the past 2 years, Netflix has increased its second quarter revenue by $2.42 billion, or 49%.

YouTube has increased its ads revenue alone by nearly $3.4 billion, or 42% more than Netflix. Since Alphabet does not disclose YouTube’s specific expenses, it is impossible to calculate its profitability. But because virtually all of YouTube’s content comes from third party creators while Netflix’s annual content tab is approaching $20 billion, suffice it to say YouTube’s ad business is far more profitable than Netflix’s subscription business. It is also fair to project that in Q3 ’21 YouTube’s ad revenue will exceed Netflix’s subscription revenue.

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At VideoNuze’s Connected TV Advertising Summit last month, one of the issues most often raised by speakers was frequency. Sometimes speakers articulated the issue through their lens as an industry participant; other times it was from their own personal experience. For example, in our final session of the conference, Cara Lewis, EVP, Head of US Investment for Amplifi USA / Dentsu spoke about her experience streaming during the miserably cold Memorial Day weekend (slightly edited for clarity):

“Frequency is definitely an issue. And I can tell you just for myself and my viewing experience this weekend, it was extremely rainy. And I watched a lot of CTV and I kept on seeing the same commercial over and over again, which is completely frustrating because I'm being told as somebody who's buying these ads that we have a frequency cap. Maybe those advertisers didn’t have one, but if they did what I saw was well over what I know our advertisers put in as a frequency cap.”  

My experience mirrors Cara’s, as I mentioned in Q&A after moderating a CTV session at Pubmatic’s ENVISION conference two weeks ago. As VideoNuze readers know, I watch a lot of professional golf, on Golf Channel, NBC and CBS, most often on my Roku devices and using YouTube TV. It is mind-boggling how often the same ads are repeated. Admittedly I’m not sure if what I’m experiencing is a CTV frequency issue. It could have much more to do with the TV network, the rights of tournament sponsors, faulty legacy TV system frequency capping, shortage of available campaigns, etc. Who knows.

Regardless of the root cause, as Cara said, as a viewer it’s frustrating and diminishes the experience (and because I’m never able to fully take my industry analyst hat off, even on weekends, I can’t stop thinking “really, where IS all this great adtech that I write about each week?”)

Having said all of that, a new report from Innovid and the ANA, “Decoding CTV Measurement,” asserts that the frequency problem is actually both “highly exaggerated” and likely only limited to very particular situations. Innovid and ANA studied 35 campaigns from 20 big advertisers, representing $35 million in ad spend across 169 publishers and 25+ connected device types.

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Mediaocean is acquiring Flashtalking, an independent ad-serving and analytics provider. Deal terms were not disclosed but the Wall Street Journal reported the valuation at $500 million. Although Flashtalking offers open web ad serving and dynamic creative optimization (DCO) for the buy side, its fastest-growing business is connected TV ad serving and analytics, Mediaocean’s CMO Aaron Goldman told me in a briefing about the deal.

Aaron noted that CTV is also the fastest-growing part of Mediaocean’s business as well, and that the combined companies will be able to do “ad serving and creative optimization along with audience planning and other workflow for both the buy side and the sell side.” A year ago Mediaocean acquired 4C, giving the company a key role in walled garden ad serving and optimization. Aaron said Flashtalking fills a big remaining gap in its portfolio focused on CTV on the open web for the buy side.

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Welcome to this week’s edition of Inside the Stream, the podcast where nScreenMedia’s Chief Analyst Colin Dixon and I take listeners inside the world of streaming video.

This week we’re pleased to have Zvika Netter, CEO and Co-Founder of Innovid, as our guest. Innovid has been in video advertising for 14 years, evolving from an early player in interactive ads to become the leading delivery and measurement platform for brands and agencies. Importantly, as Zvika explains, Innovid has held fast over the years to being independent - not involved with any media buying or selling, which he views as a clear differentiator.

Late last week Innovid achieved a major milestone, by filing to go public via a SPAC. Zvika explains the decision process, and his points are a great counterpart to our conversation last week with JW Player’s Dave Otten, who also considered a SPAC, but decided instead to raise a large private round.

But the bulk of our time with Zvika is spent drilling into CTV, what’s driving the business, the key challenges, how they’re being addressed, what’s ahead, and of course, what role Innovid is playing. For anyone who wants a really deep dive into CTV, the interview is an intimate window into the CTV ad buyers’ perspective and how this is influencing the future shape of the industry.

(Note, Colin and I will be taking a break next week for the holiday, so we’ll be back in a couple of weeks)

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Last Friday Hub Research published interesting survey results about consumers’ willingness/desire to watch ad-supported streaming services, especially if it means saving money compared to more expensive ad-free alternatives. No surprise to anyone who’s been playing close attention to the evolving SVOD/AVOD landscape, the research showed strong interest in ad-supported streaming. For me it was further validation of the Connected TV flywheel that I have described that is only going to accelerate adoption as consumption of ad-supported video both deepens and broadens.

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Welcome to this week’s edition of Inside the Stream, the podcast where nScreenMedia’s Chief Analyst Colin Dixon and I take listeners inside the world of streaming video.

Today we dive deep into the connected TV advertising flywheel, which I wrote about earlier this week. The TL;DR summary on the CTV ad flywheel is that the massive base of 82% of U.S. households with a CTV device has created a viewing platform for a growing array of free, high-quality ad-supported streaming services, the funding for which is coming from a robust CTV ad model that is siphoning spending from both linear TV budgets and mid-to-lower funnel digital/performance-oriented budgets. (Yes, I know that is a mouthful, but I break it all down on the podcast)

The CTV ad flywheel is real and it is accelerating as each element gains steam. Evidence of this abounds; just this week Disney said that 40% of its upfront commitments were focused on streaming, Roku announced record viewership of The Roku Channel following the launch of its Roku Originals (primarily the Quibi library it acquired), and Nielsen launched The Gauge, a new reporting visualization for broadcast, cable and streaming (Nielsen said streaming’s share of TV watch time was 14% in 2019, 20% in 2020 and likely 33% by the end of 2021)

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Conviva’s new State of Streaming Advertising 2021 report found that frequency is the number one problem viewers have with streaming video ads. The report is based on a survey of 1,944 adults 18+ who watch TV or streaming video, conducted by Dynata, along with Conviva’s proprietary viewer data. 59% of respondents either agreed or strongly agreed that “there are too many streaming ads repeated during the same break/episode.” The next most-cited reason, by 54% of respondents, was “when ads fail or take too long to load.” Over, just 36% of respondents said they were satisfied with advertising in streaming.

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Last week’s Connected TV Ad Summit, with 46 speakers and 14 sessions, was chock full of insights from executives on the front line of connected TV advertising. Importantly, the speakers brought a diversity of perspectives; ad buyers from agencies, ad sellers from content providers, technology providers enabling CTV advertising and analysts studying and forecasting the industry.

As the conference host and curator of all the sessions and questions, it was a golden opportunity to fully immerse myself in understanding the critical industry issues. I’ll be publishing a debrief document with all of my key takeaways, but for today, I just want to share one overarching theme that crystallized: a connected TV advertising flywheel is here, and it's only going to accelerate.

The flywheel concept is well-known to all of us; the idea that when interrelated elements of a business or industry reinforce one another, the momentum of the overall whole is accelerated. For me, the best illustration of the flywheel remains Jeff Bezos’s description of the role video plays in Amazon Prime, in his interview at the Code Conference in 2016. Summing up video’s interrelationship with Prime and the resulting flywheel, Bezos said simply, “When we win a Golden Globe, it helps us sell more shoes.”

Back to the CTV advertising flywheel, the three core components are 1) the large and growing base of households with active CTV devices including players, sticks, smart TVs, etc., 2) the proliferation of ad-supported and hybrid paid/ad-supported streaming services, each one with ever-better content and 3) the robustness of CTV ad monetization itself and how this is driving more spending into the category.

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Following up yesterday’s post, today I’m pleased to share video recordings of the 7 sessions from the second afternoon of last week’s Connected TV Advertising Summit virtual. Below I have also included the session description for each, along with the speakers. (Note the CTV Ad Summit web site has been de-activated, post conference). Reminder, the first afternoon's session recordings are here.

For anyone focused on how to succeed in CTV advertising, there are lots of really valuable insights and data. For example, to get a sense of why the CTV ad opportunity will exceed $27 billion by 2025 in the U.S. alone, watch the presentation from eMarketer / Insider Intelligence’s Eric Haggstrom. To learn how buyers are thinking about CTV ads, watch the session with Amplifi/Dentsu’s Mike Law and Cara Lewis. To learn about Roku’s playbook for CTV success, watch the interview with Alison Levin.

And don’t miss the panels focused on programmatic’s role in CTV, how smart TV makers are positioning themselves for ad success, the new rules of targeting/data and the big changes coming to TV advertising.

If you attended please see my email yesterday with an attendee survey. I’m very interested in your feedback on the Summit and how to further improve it.

Watch the session videos now!

Last Wednesday and Thursday’s Connected TV Ad Summit virtual included 46 industry executives speaking on 14 different sessions over two afternoon. Having watched all of the sessions, I think they include tons of valuable insights and data that is actionable for anyone looking to succeed in CTV advertising.

I’ll be posting more in-depth about my key takeaways from the CTV Ad Summit, but for today, I’m pleased to share video recordings of the 7 sessions from the first afternoon (I’ll post the videos from the second afternoon tomorrow). Below I have also included the session description for each, along with the speakers. (Note the CTV Ad Summit web site has been de-activated, post conference).

If you attended please keep an eye out for email with an attendee survey. I’m very interested in your feedback on the Summit and how to further improve it.

Watch the session videos now!

The Connected TV Advertising Summit virtual will be taking place on June 9th and 10th, starting at 1pm ET / 10am PT each day.

Registration is complimentary. If you haven’t registered already, you can do so during the Summit and you’ll receive an email from VideoNuze Events with the Zoom links.

You can also follow along on Twitter at #CTVAds2021. See you at the Summit!

A final reminder, tomorrow afternoon and Thursday afternoon are VideoNuze’s Connected TV Advertising Summit virtual, featuring over 45 speakers on 14 sessions. Registration for the CTV Ad Summit is complimentary and all attendees will be entered to win a 50-inch Roku TV and Smart Soundbar, generously provided by Roku.

Each afternoon will kick off with a research presentation sizing the massive size of the CTV advertising opportunity. Tomorrow Bruce Leichtman from Leichtman Research Group will share newly released data highlighting, among other things, that CTVs are now in 82% of U.S. homes, with over 400 million devices deployed. On Thursday Eric Haggstrom from eMarketer / Insider Intelligence will share the details of the firm’s CTV ad forecast in the U.S., which it recently increased to over $27 billion per year by 2025.

The conference also features executives from Roku, NBCUniversal, Bloomberg, Tubi, Amplifi/Dentsu, Publicis, LG, Samsung, VIZIO, Vevo, A+E Networks, fuboTV, Crackle, Digitas and many others. They will explore all of the most important topics in CTV advertising, including challenges that still need to be worked out, in transparency, measurement and frequency, for example.

Many thanks to our partners Beachfront, Comcast Technology Solutions, DoubleVerify, Evergent, Extreme Reach, IRIS.TV, Mediaocean, Roku, Verizon Media, Wurl and Xandr.

REGISTER NOW!

(If you’ve already signed up, please disregard this message and check your inbox for important Zoom links for the conference.)

IRIS.TV and SpotX (part of Magnite) announced this morning they’re partnering to offer industry-standard contextual targeting segments to SpotX’s video ad supply. The move will give ad buyers the ability to target and verify the category of video on all screens.

SpotX will be able to give ad buyers access to video-level metadata that has been “IRIS-enabled” for targeting in CTV and digital video, driving more value for content owners, especially in in brand-safe CTV where viewership is soaring and ad performance is superior.

Noting the challenges the partnership will overcome, SpotX’s SVP of Strategic Partnerships Kristen William said, “Our clients have been demanding increased visibility into the content they are advertising in, but access to contextual data is extremely complicated as it comes in a variety of formats as well as being locked behind content management systems and video players.”

For more on how IRIS.TV enables video data for contextual segmentation to create more value for both ad buyers and content owners, see my interview below with VP of Publisher Partnerships Lauren Gabriele. Lauren will also be moderating a session at this week’s VideoNuze Connected TV Ad Summit virtual “Targeting in CTV: The New Data Paradigm,” with Xumo, Index Exchange and Icon Media Direct.

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Welcome to this week’s edition of Inside the Stream, the podcast where nScreenMedia’s Chief Analyst Colin Dixon and I take listeners inside the world of streaming video.

SVOD providers have been the dominant force in creating original TV shows for streaming, but as the recent NewFronts underscored, AVOD services like Roku, Crackle, Tubi and many others are also forging ahead with their own originals.

On today’s podcast Colin and I discuss why it’s strategic for AVODs to pursue originals, how they’ll differentiate at a time when SVOD productions are increasingly lavish, what impact lighter ad loads will have and how these originals will be available - solely on-demand or also in free ad-supported TV / FAST? It’s still quite early and there are lots of questions to consider.

(Note: Colin will be moderating a session titled “FASTs + AVOD = Big Opportunity” at next week’s Connected TV Ad Summit virtual, with executives from Tubi, A+E Networks, Digitas and Wurl, which includes discussion of originals and ad loads. Complimentary registration!)

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