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Demand for Digital Video Inventory is Soaring: Should Pubs Jump in with Both Feet?

Have you seen eMarketer’s new report, Q1 2016 Digital Video Trends: Monetization, Audience, Platforms and Content? It’s a veritable call-to-arms for publishers: create video ad inventory (and lots of it) or perish. Okay, I’m exaggerating a bit, but consider some of the findings:

  • US digital video ad spend will reach $28.08 billion in 2020, up from $9,9 billion in 2016

  • In 2016, video ad spend will account for 19.7% of the marketer’s budget

In short, video is “the fastest-growing category on mobile, on desktop and overall from 2016 through 2020.”

I get why many publishers would look at these stats and go all-in with video inventory, but I’d caution a more measured approach. Here’s why:

Broadly speaking, there are two types of video ad units: in-stream and in-banner. In-stream videos are typically the most desirable for advertisers since they appear within content that readers have chosen to view. But the number of editorial videos you have on your site will drive your volume of in-stream units. You can’t increase your volume without first creating (or acquiring) lots of videos. In-banner video, on the other hand, is a more scalable approach. You simply offer rich-media banners with a video player and sell like mad, right?

I've heard at least one publisher say "video is video," which is to say, let's look at it holistically, not in silos. That’s an excellent point if you wish to create a consistent and valuable experience both for your readers and your advertisers.

Let’s start with your readers. In-banner video ads will provide you with lots of video inventory to sell, but will it annoy your readers and diminish your brand experience if every page has video ads? Especially if that ad is auto-play? Oversaturation is one of the factors that drove consumers to seek out ad-blocking software, and a lot of video ads will exacerbate their frustration.

As for your advertisers, naturally, they want their video ads to be served to their ideal target audiences, and frankly, so should you, since a successful campaign will mean repeat business and the opportunity to charge higher CMPs. But this goal presents a challenge. Specifically, some ad servers pre-select the ads to display prior to ad call, which means they don’t allow for real-time optimization. That burden may fall to your traffickers and site managers who’ll need to actively manage some of the campaign settings required to help your advertisers succeed.

And the old conundrum of programmatic is exacerbated in video. If an RTB advertiser is good enough to run on your site, then you may want to transact with them directly. This isn't bottom of the page inventory and those decisions are high risk and high profile. Virtually all programmatic solutions have the controls publishers need to manage who buys and how, but it requires vigilance and transparency with sales leadership.

Like all things digital advertising, you have a lot to gain by considering:

  • The best way to effectively manage and optimize video ad business

  • Current and future trend analysis to drive yield

  • Identify opportunities for growth and optimization

  • Identify a sustainable video solution through ongoing testing, iteration and analysis

In the end, video is hot because it works at converting customers. But to make it work for you, you need to understand how to add video to your mix in ways that enhance the brand experience for both your readers and advertisers.