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The rapid rise in video consumption – good news?

Video consumption is going through the roof. According to a forecast published in the Cisco Visual Networking Index (VNI), total Internet video traffic will be 79% of all global Internet traffic in 2020, up from 63% in 2015.
This sounds like great news for the video industry, and it should be. But for thousands of video service providers and OTT platforms worldwide, this exciting statistic is a cause for a lot of stress, because it brings with it a set of growing challenges and an uncertain future.

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Video is fundamentally different from all other digital advertising formats, and it must be planned, executed, and measured as such. What’s more, video has converged with OTT, VOD and essentially all programs accessible via Connected TV, which brings both opportunity and complexity. Finally - based on the availability of cross-screen audience and ratings data - video is on a collision course with linear broadcast, cable, and satellite TV, which has its own arcane processes, systems, and economics.

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OTT viewership has increased dramatically in the last year. So, it is no surprise that ad dollars are pouring into the category. Reports estimate that advertising revenue in the market just exceeded $50 billion for the first time. And as more OTT options and channels emerge, and as OTT advertising capabilities and measurement grow more sophisticated, investments will continue to rise.
 
Beyond growth, however, how else will the OTT ad landscape evolve this year? 2017 saw a number of unique developments, from more traditional broadcasters entering the space to a surge in acquisitions. But what will happen in 2018?

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Creating a Leakproof Life Preserver to Save Journalism

It was Jeff Zucker - then head of NBCUniversal, now running Donald Trump’s favorite, CNN – who coined the famous cautionary phrase, trading “analog dollars for digital pennies” nearly 10 years ago. He warned of an economic Armageddon as digital advertising drained high-priced, high-margin volume away from traditional TV broadcasters.

He was right. In fact, a decade has meant the continued crushing of the revenue streams of more than just the broadcast networks, but journalism at large. Newspapers are increasingly shutting down their print editions; many magazines have it even harder. Relentless innovation in programmatic advertising gives marketers the ability to navigate autonomously to the highest value/lowest CPM impression.

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Video has attracted the interest of advertisers, which means that it has become a point of emphasis for publishers as well. This has brought on increased competition for traditional pre-roll inventory, forcing both advertisers and publishers alike to explore new units that can deliver video experiences.



One area that has grown immensely in popularity is native video, with publishers like The New York Times, The Wall Street Journal, Hearst, Forbes, The Huffington Post and BuzzFeed all exploring native models.

 Native’s growth isn’t simply due to the fact that it’s available and fulfilling the market demand for more inventory. Instead, it’s growing in popularity - and performance - for reasons that fly in the face of conventional ad industry wisdom. Here’s a look at what’s driving native video’s growth.

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It didn’t happen as quickly as it did in display advertising, but last year saw a tipping point when the majority of US digital video ad spend was transacted through programmatic technologies, according to eMarketer. It is no wonder these systems are forecast to account for 74% of video spending by 2018 - advertisers now have an insatiable appetite for video inventory, and they are pushing publishers to offer space using the same data-driven trading technologies they currently enjoy in display.

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According to the FreeWheel Video Monetization Report: Q1 2017, 16% of all ad views took place on short-form video clips. However, in Q1 2017, 58% of all video starts were clips (less than 5 mins) and while less time is spent and fewer ads are served compared to long-form and live content, the monetization strategy and user experience of short-form content, given its sheer volume, is of great importance to premium video providers.

The FreeWheel Council for Premium Video set out to study the impact on the viewer across different ad experiences when watching short-form video. Partnering with RealEyes, a leading emotion measurement platform, we exposed 2964 adults aged 18-49 to a set of nine different scenarios of premium video content and ads, to measure the different levels of engagement and emotional reactions through facial recognition technology, as well as surveying them on their overall experience.

The results of this unique study were really interesting:

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Don’t blink or you might miss it.

Last week, it was reported that Mars and Duracell are each airing two six-second television ad spots during this Sunday’s Teen Choice Awards. Fox announced that the ads, which take the place of a single 15 or 30-second ad, will be part of new 29-second pods that will begin by telling viewers to stay-put for four six-second ads.

The reasoning behind this move should come as no surprise - today’s teens show a clear preference for short-form content and clearly seem to be influenced by short ad lengths.

But the news underscores a bigger issue - are demographics the key driver of shorter ad lengths?

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