Ad revenues for online video are growing, because more ads are getting placed even though ad prices are falling.
At least according to video ad network BrightRoll, which says it is seeing rapid revenue growth, citing third quarter financial numbers.
“Online video advertising is growing fast enough to make up for most of the fallout in display, email and other online businesses,” said chief executive Tod Sacerdoti. Additionally, campaign momentum is accelerating around its “performance pricing” structure, which includes CPE (cost per engagement), CPV (cost per completed video) and CPC (cost per click).
The market’s growing due to the availability of more inventory, Sacerdoti said (BrightRoll claims to offer the largest selection of branded video ad inventory of any third party ad network), plus publishers’ ability to move their video ad content to higher monetized/trafficked areas due to better targeting capabilities. With online behavioral targeting now available on the BrightRoll platform, and more content, plus the recessionary decreases in costs, online video advertising has become more recession resistant than other forms of advertising including online display and paid search.
According to Comscore, BrightRoll’s network now ranks in position #11 on the top 100 Video Properties (I’ve included the October list below), which is impressive when you consider they’re competing against the likes of Hulu, Facebook, Fox, etc. While it’s unlikely BrightRoll will beat out YouTube’s online ad network anytime soon, Sacerdoti believes the top five positions will be ad networks by this time next year.
According to BrightRoll, “Two overarching trends in 2009 are the importance of consumer product goods advertisers, now representing their largest ad category, and the trend of online advertising monetizing content beyond simply branded video content.”
In BrightRoll’s Q3 update, it says the high price of online video is no longer a barrier to video advertising, as the price has fallen and performance pricing (CPE, CPV, CPC) has emerged while Q3 sales are soaring. The company says the number of campaigns is up 46 percent, quarter-over-quarter, while the number of advertisers is up 31 percent.
Earlier this year, BrightRoll introduced performance pricing, whose success, over the first few months, is compelling. Take the case of Ooma, a phone service that lets anyone make free calls over the internet using its own device, the Ooma Telo. It’s not hard to see why Ooma is happy with their BrightRoll campaign, according to its statement in a recent BrightRoll press release.
I asked Sacerdoti about the technology and metrics the BrightRoll platform is able to collect and offer its clients. Monetizing online video has been somewhat problematic because the technology in place interfered with easy communications between publishers and third party video ad platforms.
But that’s beginning to change, partly due to the IAB (Internet Advertising Bureau), via the VAST Standard. According to the IAB, VAST (Video Ad Serving Template) includes a standard XML-based ad response for in-stream video and an XML Schema Definition (“XSD”) for developers. It’s meant to accommodate the majority of current practices within the online digital video advertising business. The gains we‘re seeing now were almost impossible to achieve until the VAST Standard made it easier to obtain end-to-end control between ad servers and associated video players.
Among the issues evolving, but yet to be fully resolved, control of the video player looms large, BrightRoll offers end-to-end control of the entire streaming process (measurement/optimization of it), while publishers usually want control of the video player, which ends up interfering with the best analytics we could get, according to Sacerdoti.
While most publishers do not typically relinquish control of the video player, a lot of data can still be gathered such as eyeballs viewing a video ad — often, by forcing an interaction to find out how present and engaged viewers are at key points while the video is streaming, which tells BrightRoll that viewers are still paying attention to a video.
Discussion about video ad standards and the success of BrightRoll’s performance pricing is encouraging because it’s a sign standards organizations such as the Internet Advertising Bureau and Web Analytics Association are effective and necessary for the evolution of online video advertising, web analytics and social media. The end results of standards implementation are better communications and measurement, ultimately resulting in higher monetization and a lower cost — and that’s to everyone’s benefit.
Among future developments to be tackled are the localization of video advertising –- Sacerdoti mentioned if an advertiser had $1 million to spend targeting the San Francisco Bay Area, there would not be enough publishers to spend that money, today. But in the future, he says there will be a large amount of local targeted advertising. And that will make third party video ad networks like BrightRoll even more profitable.