Written by: Kerstin Recker, Vice President Marketing & Business Development
I sat down with NTENT’s CRO, Kevin Van Lenten, to discuss the growth in online video, the implications for advertisers, publishers and consumers as well as future trends.
KR: Over the past 3 months, the online video ad industry achieved record breaking growth, serving 20B+ video ad views. In your opinion, what has been driving this surge in video ads?
KVL: The video ad space is just heating up and it’s exciting. Consumer behavior is changing. People are busy. They don’t want to adjust their schedules around the programming they want to watch. They are adjusting their TV/video viewing schedule in a manner that makes sense with their schedules. What’s happening is that advertisers are understanding that people are consuming more and more videos online and on mobile. In addition, new technologies are emerging, making it easier to discover content. Search is changing the game, specifically semantic search technology. It’s changed the face of search because of its ability to understand content, context and user intent. Brands realize that video viewing is on the rise, and that it is allowing them to interact with consumers in a totally new way (think interactive video). Smart brand managers are adapting their strategies to stay on top of this new trend.
KR: Digital publishers are starting to take back ownership of their video content by developing their own video destinations and explore alternative distribution strategies. Why are publishers shifting their strategies? What’s the impact?
KVL: Content creation is a complicated and expensive process. Let me rephrase that; producing compelling content that consumers want to watch is a complicated and expensive process. Publishers and content creators assume a lot of upfront investment: shooting in HD, production fees, housing the content online/creating a destination and distribution. They want to get the biggest bang for the buck to cover the cost of production and then some.
Content creators have realized that brands want good editorial content AND they are willing to pay for it. What’s occurring in the video space right now is logical: publishers aren’t just looking for ways to “give their content” away, they are becoming more strategic about who they partner with in order to drive greater returns. If that means partnering with content syndication providers to get eyeballs to their video, that’s fine, as long as they have a share in the revenue. This is why we are seeing publishers start to pull back their content from exclusive deals that tie them; sites like Netflix and YouTube – the numbers just don’t make sense.
KR: Taking back ownership of content opens up new doors for new relationships. How do you see the relationship between brands and publishers changing?
KVL: The right partnership will allow content producers to create a one-to-one relationship with brands interested in aligning with their video. By taking back ownership of their content, they can incorporate brands into their story. For example: We’re getting ready to roll out an all new fashion franchise on our online video channel, Uvidi, called Style Fix. This gives us the opportunity to work with fashion brands and explore creative integrations that will appeal to consumers in more meaningful ways.
The upside is simple, publishers will get distribution through a third party to drive up video views; advertisers get access to qualified consumers and cool integration opportunities; consumers get better advertising experience that makes sense with the content they are consuming.
KR: Consumers demand real-time relevance when it comes to messages and content discovery promotions. How are publishers adapting to this and/or including this in their video strategy?
KVL: This is where semantic search technology shines! Semantic search technology makes real-time relevance possible! A recommendation engine powered by semantic search technology is able to do the following: if consumers are on a website, reading a piece of content, the next piece of content that a consumer sees will likely be relevant to what they are already watching. At the end of the day consumers will welcome recommendations that are relevant and personal and that can help make discovering content easier.
At NTENT, we are responding by creating products that meet the growing demands of publishers, advertisers and consumers. FeaturePlay delivers video recommendations to users based on their interests in the context of the sites they are on. This is similar to what Taboola and Outbrain are doing but different in that FeaturePlay has an added layer of semantic intelligence. Uvidi and FeaturePlay use semantic targeting to look at the true sentiment of the page to figure out which content is most relevant to the consumer. This is good for brands, and for content providers, because it creates engagement and that means monetization.
KR: What are the challenges that publishers are facing in terms of driving video views and developing an ongoing strategy?
KVL: Every major advertiser wants video views. Publishers are racing to create compelling content that appeals to users and to advertisers. The challenge is driving enough traffic to fill ad buys. In order to do so, publishers are turning to traffic acquisition solutions. Unfortunately, a number of them have been burned by bad traffic providers. Publishers need to be very careful when it comes to traffic acquisition. It’s a very complicated world. Before buying traffic, they need to know if the source they are getting traffic from is buying traffic programmatically, is traffic coming from unfavorable sources and if they have any signs of bot traffic.
In the traffic space, there are a few good sources and a lot of bad apples. At NTENT, we’ve spent a lot of time, and put in a lot of effort, creating a system and process that brings legitimacy to traffic acquisition. In fact, we uphold ourselves to a Security Integrity Process.
KR: What trends do you foresee happening in the video space over the next year?
KVL: Nothing earth-shattering. However, the video game, and the way it’s played, will continue to become more sophisticated. Content producers will become more selective about the type of content they produce and who they will work with to distribute and drive views. Publishers are going to want to be able to sell directly into their distribution channels and will be willing to share that revenue with their syndication partners. Advertisers will see prices go up for good content.
KR: What piece of advice can you offer to publishers who are actively pursuing to grow the video business?
KVL: Businesses can be built or destroyed by traffic acquisition partners. Do your research and choose carefully.
I’d like to also share something I recently read that really puts video into perspective: “Content is King. Distribution is Queen and She Wears the Pants!” – Keep this in mind when you’re planning out your video strategy today and in the future.
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