Perspectives What's this?

In 2014 I cut the cord. We live in Toronto, Canada, are not a sports family, and watch mostly drama. The kids watch only Netflix, so for them, cutting the cord really had no impact. We made the conscious decision to buy whatever we wanted to watch, as I suspected we would never come close to the monthly cable bill we had just shed.  But the truth is always more complicated, and in a surprising turn of events, I find myself back with Bell Canada’s Fibe TV a year later. 

A look back at our purchases and motivations is quite revealing, considering the disruption going on in the video industry.

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In 2013 alone, $2.8 billion was spent on digital video advertising. It’s a significant investment, and one that continues to grow exponentially. Online video investment is increasing at a double-digit pace, and spending is projected to top $8 billion by 2016.*

However, according to data from Vindico’s Adtricity system, only 34 percent of digital video ads rate as ‘high quality.’** In addition, fifty-seven percent of two billion video ads did not have the opportunity to be seen (‘unviewable’) over a recent two-month period. These are not new and surprising findings, however what is shocking is that the advertising industry does not have a consistent standard or approach in how to deal with existing viewability and fraud issues.

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The growth of online video consumption is staggering, and continues to show no sign of slowing down. With YouTube and Facebook alone, well over five billion videos are watched every single day.

Given the rapid growth, it’s no surprise that brands and advertisers have quickly adapted to using video ads as the means of reaching and connecting with consumers.  To measure their investment in these video ads, most advertisers are using the easiest and most simple way they know - counting video views - but the number of times a video was watched, whether partially or in its entirety, doesn’t actually mean much.  
Pre-roll is the most common way advertisers are buying video ads today. However, according to a study by research firm MetrixLab, 94% of viewers skip pre-roll ads.  For the few consumers who don't skip the ad, more often than not they are simply ignoring it. So how much weight should an advertiser place on the value of video views?

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In early September, my 11-year-old son filled out a get-to-know-you school questionnaire, listing his favorite things - tigers, the color orange, and...binge-watching.

My boy, who dove deep during summer break into Alphas (originally on Syfy, now on Netflix, highly underrated), has tons of company. More than 75% of TV Guide users say they binge-watch regularly. Remarkably, a behavior for which we didn’t even have a name a few years ago is now an exploding mass-market consumer habit that is changing the TV game - and benefitting both consumers and entertainment companies - in three major ways:

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Making the long flight back from Las Vegas to London, I always have plenty of time to reflect on the Consumer Electronics Show when it’s over.  As usual, the level of innovation and the growth of consumer connectedness this year was staggering.  The sheer breadth and scale of the exhibition space makes it difficult to initially take it all in. Themes make themselves apparent slowly, trends and developments slowly reveal themselves as connections and commonality coalesce into patterns.

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According to a recent study by Nielsen, 15% of viewers said they enjoyed watching television more when social media was involved. By now, we know that consumers are using these screens to browse the web, talk on social networks about what they're watching or access complementary content that enhances their experience. So what new and different opportunities does this activity create for pay-TV operators and programmers to leverage the second screen for increased tune-in, engagement and ad revenues?

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It's apparent that the long-awaited convergence of TV and digital video is happening. From consumer adoption of connected TVs, increasing preference for cross-screen content and decisions from major brands to move ad budgets online, it's easy to view 2014 as the launch pad for digital video's rise.

The challenge ahead is to fuse the effectiveness of video branding with the efficiencies of digital personalization. The first milestone will - of course - be measurement. The digital video market today primarily measures digital video advertising with the same metrics as traditional TV ads. Even today, in an environment in which digital has proven its power, most online video ads are un-personalized TV spots measured by the TV metrics of reach or gross ratings points (GRP).

This approach doesn’t take advantage of today's more precise measurement techniques. While reach and overall awareness are important, brands can now look directly at performance metrics that drive purchase activities, such as product research, lead generation, in-store foot traffic and offline sales.

Eyeview, the leading personalized video advertising platform, recently hosted its second "Beyond Impressions" event at New York City's Gansevoort Hotel. Focusing on the main challenges and trends in digital video, industry experts from Land Rover, Media Storm, Macy’s, Mercedes-Benz, Nielsen and others came together to share thoughts on digital advertising best practices and predictions for the future.

A common thread throughout was that advertisers everywhere must reset their thinking and throw out antiquated, TV-based approaches if we are ever to take full advantage of the full power that digital tools offer. Here are a few major discussion points and takeaways from the event.

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Data is changing network TV advertising sales in ways that rival previous industry shifts. Cross-platform advertising and audience measurement, advanced audience selling capabilities, and new campaign creative informed by big data insights are driving this change.

The result? More opportunities to increase monetization of ad inventory, including working with advertisers and agencies to differentiate cross-platform campaigns, establishing a cohesive premium programmatic strategy, and developing original branded content tailored to resonate with target audience segments.

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