Evolve or die: the changing paradigm of Video Advertising.

Industry insights

For several years now, the Web has become one of the most used channels for advertising, showing steady investment increase reaching new record heights and growing exponentially.

Google and the Social Networks exert a tight control on the web community, collecting thousands of user’s data, and then using them to refine marketing and advertising strategies of companies.

The OTT platforms’ advertising and SEO strategies are various, all aggressive and apparently much loved by advertisers who have, surprisingly, chosen them over editorials within Publisher’s pages.

In a few years, giants like Google, Facebook and Youtube have managed to capture the economic and media dominance of the ADV market, collecting about 60% of online video advertising investments.

Video advertising, according to IAB estimates, absorbs 20% of the total ADV on the Internet. Most of online pre-rolls come from Youtube (80%) but by now Facebook, thanks to the implementation of its players and programmatic ADV, holds a record of investment and revenue.

In 2015 only, the latter raised $ 17 billion from advertisers, while Google gained two-thirds of its total revenue ($ 75 billion) via AdWords and AdSense, two advertising offerings by the same search engine.

Most social platforms allow advertisers to access their audience easily and directly within the broadest online community ever.

This trend has greatly weakened publishers, which had to share the remaining 40% (in 2015, only 61 billion dollars in investment worldwide), with media products videos, which are also worn out by ruthless competition.

The advertisers’ rush from editorial pages to OTT platforms, however, has serious side effects that should not be underestimated. In fact, brands and their messages are exposed to what has come to be known in the industry as ‘social anarchy’, meaning that they are constantly subjected to user comments and judgement, the so-called “word of mouth”, which could irreparably damage and devalue them.

These advertisements most often show up in very generalist contexts, where users have very low levels of concentration and most often surf the web without a specific goal, or even in highly controversial contexts, such as the recent striking cases of video ads posted on Youtube next to racist or even terror-related content, which has unsurprisingly initiated a real exodus of major brands from the platform.

So why do publishers fail to monetise and fully exploit the great opportunity of having premium content and loyal user traffic to their web pages?

The answer is linked to economic and practical reasons.

The complexity and cost of adopting video technology often prevents publishers from getting the expected returns. In addition, the high cost of video capture and production leads to the inevitable consequence of virtually no inventory availability and the adoption of artificial banners.

This state of affairs frustrates and distracts advertisers, who are therefore forced to shift their investment toward the OTTs, which in turn have been investing in strengthening their platforms in recent years, perfecting their performance and thus becoming de facto monopolies of online advertising.

The only solution to this problem is the adoption of an all in one technology, an independent platform that cuts down on production and maintenance costs for Publishers whilst maintaining contextual and native advertising that can fit with conversations consistent with the product being promoted.

Adopting such a solution would re-balance the current advertising paradigm, rewarding premium publishers and their engaging, high quality content.

Advertisers need a safe place to connect with their audience by protecting their own image and this place is the Publisher.

In this way, online advertising becomes beneficial for all the parties involved. Advertisers buy highly profiled ads that appear in the ecosystem that best suits them, Publishers monetise and increase traffic on their pages, and Users enjoy smarter, less invasive advertising.