Autor: Lars Drawert

DPP - The Future of Video Advertising (2 / 3)

What will video advertising look like in the future?

The Discussion

1. Measurement

The cornerstone of a successful relationship between advertising and video content – whatever the platform – is the ability to measure the scale and quality of viewer engagement.
As Lindsay Pattison pointed out, the metrics around advertising on TV are far from perfect – but at least they are well established. It could be argued that what connected viewing has done is to highlight the potential for metrics to be so much better – and to measure reliably at the individual level.
In short, the more we know about what we could measure, the more aware we are of the limitations in the way we currently measure engagement – on all platforms. As our leaders observed, the fact that online measurement is not yet reliable is not in itself an argument for the reliability of TV metrics:

“Is the superiority of advertising on TV to do with the quality of the content experience – or the fact we can’t really measure online engagement in a way we yet understand?”

Currently we lack an ability to compare the TV and online environments in the same way. We might look at time and money spent, but we don’t yet have a way of taking into account the quality of the environment – the impact, for example, of seeing an advert next to content in which the consumer is particularly interested. We don’t yet know about the state of mind that might inform the choice of one type of screen – or viewing environment – over another. We can imagine such metrics – but they are extremely difficult to gather.

What we do know however, is that content tailored to the environment in which it is intended to be viewed (often referred to as native content) will perform better than content that isn’t. And that applies just as strongly to advertising as any other kinds of video.
The frustration for many of our leaders however, is that this reality about native content still appears to be so poorly understood.

“A lot of major TV companies are picking up TV programmes, slamming them onto a mobile device and saying, why isn’t it returning what the TV returns? Well, it wasn’t made for mobile, it wasn’t cut for mobile, it wasn’t made for a mobile demographic.”

There is a reluctance, some argue, to accept just how different mobile content needs to be. The whole visual grammar needs to change; pacing needs to change; the audio needs to change; even the aspect ratio – changing from landscape to portrait – is different.

Put another way, there needs to be greater nuance about what advertising is trying to achieve, and which platform serves that purpose most effectively. This observation took the conversation into some of the key terms associated with video advertising, such as addressability, execution and attribution. Addressable advertising is the ability to segment an audience selectively and serve them different ads, or versions of an ad. Execution refers to the activation of the sales process. Attribution is the ability to allocate a sale to a particular consumer touchpoint.

“There is a danger of this debate becoming an either/or thing. You can pit TV and online against each other as though they’re equivalent to each other, but they‘re not. The marketing funnel has different levels and what linear TV, with its mass audience, is good for is brand awareness; but it won’t do the actual execution piece – whereas an addressable offering online can. And there’s a whole attribution piece that goes down the middle. So, there’s more to this discussion than saying this thing or that thing doesn’t work.”

The key question this nuance invites is: how do we find the right synergy between what each different platform and each type of content can offer, and what each type of advertising is trying to achieve?
The answer to that question is made more complicated by the fact that the effectiveness of advertising may by achieved over time – perhaps even a long time – and across different platforms. It is extremely difficult to tie either a decision to buy, or the achievement of brand affinity, to a particular moment.

“You don’t wake up aged 56 – which is the average age of a Mercedes E-Class buyer – saying, “today I’m going to buy a Mercedes E-Class.” You’ve built up your association over a period of years. You might see an ad online that convinces you to click, to configure a car, go to a dealer and convert to a sale. But that should not be attributed back purely to that online journey. There is a macro emotional moment, and then there are micro moments where brands are talking directly to someone, with very precise content tailored to them.”

This need to generate moments where advertising is addressable down to the individual is driving a great deal of activity in the technology sector. The technological challenge is not simply to track and measure individual engagements in order to build a personalised profile; it is also to ensure that the engagement is genuine.

“At the marketing trade shows there is a lot of technology around fraud detection: analytics that try to work out if this person I’m advertising to really is the person I think they are. Am I serving the right ad to the person who I think I’m serving it to? But this is also where video advertising is a fantastic opportunity, because there is a direct link to the medium that is being consumed anyway. It’s a much more direct correlation than a website where I might be reading a news story and suddenly be presented with an ad for something else with no correlation to what I am reading.”

The automation of this process of serving the right advert at the right moment into the right content is known as programmatic advertising. Historically it has been associated with online environments. But the growth of digital distribution, with even linear TV increasingly being provided over IP, means that programmatic advertising can now be applied to a wide range of environments.

“All advertising will be programmatic in the future.”

2. Consumer data

If all advertising in the future is to be programmatic, it is going to need more and more data about consumers. But is that something that consumers are going to permit? Could consumer anxiety about data privacy hold online video advertising back, and keep it locked in the TV world of more aggregated data?
The reality is as follows. Silicon Valley companies will always pursue data and try to understand exactly what’s going on in their business or service. The technology is advancing very quickly, and the algorithms will only get better. It’s nothing to be afraid of. It’s going to get better to the point where we’ll be able to pinpoint people’s emotions, what they’re likely to be thinking about a brand, and what actions that might lead to. But meanwhile we have reached a tipping point, particularly in the United States, that means people are going to expect to be able to see what’s happening with data about their attention. Which means there’s an opportunity – if you have great content – to get in the middle of that and work with that transparency
The micro-targeting of people’s opinion through social media has created a rapid backlash. But is that just because the technology is moving faster than society’s ability to cope with it? It is very difficult to predict how consumers – and especially future generations of consumers – will come to see the privacy and value of their data.

“With TV you know which room you’re going into; in digital there’s a lot of places where, because the barriers to entry for businesses are very low, the consumer is not so safe.”

As smartphones develop an increasingly intimate relationship with us – using facial recognition for example – the data collection potential will be enormous. Will advertisers come to demand access to that data; and will consumers choose to resist it? Or will consumers just get smarter?

“If you’re legitimately collecting data on people’s usage and they know it and they accept it, then what you do with that is okay. I don’t see people complaining about video platforms offering them programmes they’d like to see. There’s the holding of personal data in order to sell it for profit and there’s holding personal data in order to iterate your product to make it better for your user. There is a significant difference between the two.”

Opinions differed on just how aware most consumers are about the data that is collected about them and how it is used. But some could see the emergence of a more formally transactional relationship between the consumer and those who want access to their data.

“In Japan they are seriously thinking about creating a data mart for consumer data. They are very concerned about the audience data held by the tech giants, and they are looking for an alternative. One of the models they’re talking about is one in which consumers are paid for the use of their data: where they are given some kind of token. That could create very new advertising models.”

3. Consumer engagement

If it is the case that we are on an inexorable journey towards all advertising being programmatic, in all environments, then it could be argued that the fact that different demographics consume in different ways is not important – since that is precisely what programmatic advertising is designed to address. It seems reasonable to assume that, just as water finds its level, the most appropriate advertising will – with time and growing technological sophistication – find its audience.
The key question for the future of video advertising then shifts. Now it becomes about whether advertisers will derive sufficient value from video advertising to continue to use it as a primary medium; and whether content makers will derive sufficient revenue from advertising to fund their content creation model.

“The question is how can the video ecosystem and advertising have a positive relationship together. And isn’t that ultimately a question about engagement – engagement both for the programme content and the ad content? You can have the most brilliant ad in the world, and the most brilliant measuring system and delivery mechanisms, but if the programme content isn’t that good, people aren’t going to see the ad.”

Perhaps the only behavioural consideration that matters is how much human beings actually want to consume adverts.

“I think of adverts as consumed products. It ultimately comes down to the purchase of goods – that’s where the revenue stream starts and everything else is just efficacy up-stream from that. So if you can make your purchases with fewer influences then the amount of advertising you need actually drops.”

One of the challenges at the moment, it was argued, is that some people think they can get content for free – not understanding that the content is paid for by advertising, and that a synergy between content creation and advertising is required.

“Nothing in life is free. But if you actually make the connection sensible enough between the ads that are shown and the content that’s shown, then actually people will watch those ads.”

“The UK provides an interesting reference model. You’ve got commercial channels and you’ve got the BBC. Do people watch the BBC because they don’t want ads? Or do they watch ITV because it’s got a great programme? If people didn’t want to watch content because of the ads, then they’d all be watching BBC.”

“People stay through an ad to see the content. It’s all about the eyeballs, right? The advertising has to always follow where the users go. And one thing we can say is that advertising’s slow at keeping up with where the users are going. The challenge we face is about tailoring the advertisements to the context of the content. In the case of mobile video, the content will be a two or three minute video, so a 30 second ad before it isn’t a great experience. It’s a matter of the advertising industry continuing to follow where the eyeballs are going and then developing the right creative that connects with them.

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