The Drum Awards for Marketing - Extended Deadline

-d -h -min -sec

Video

Best Practices for Getting Video to Scale

By Brian Dutt | Director, Advisory Services

November 16, 2014 | 8 min read

Every quarter, FreeWheel explores the evolution of today’s diverse array of viewing platforms in our Quarterly Monetization Report and if there’s one thing that’s certain, it’s that the importance of online video to the future of the TV and entertainment ecosystem has become indisputable. The video industry continues to see strong double-digit growth propelled by viewer migration across a new wealth of screens and environments, the rise of authenticated viewing, consumer access to new content, and the emergence of new distribution platforms.

Brian Dutt, Freewheel

To bring video to scale, it is critical that publishers focus on building strategies and operating models across the entire workflow from “pitch to pay.” Maximizing ad revenue, creating positive TV viewer experiences, and delivering value for advertisers all begin with pre-sale processes. This means learning how to identify the challenges and opportunities before you attempt to execute a scalable delivery and liability management process.

We’ve addressed the questions surrounding strategies for delivery management to help you prepare for your own strategy for getting video to scale.

How can publishers optimize inventory across all screens and distributors?

Video is an unmistakably cross-platform medium. What we see across our client base is viewer time-spent continually fragmenting across desktop, mobile, tablet and OTT (e.g., gaming consoles, dongles) devices. However, ad monetization still remains heavily concentrated on the oldest of those four platforms – the good old desktop / laptop (73 per cent of total FreeWheel ad views in Q3 2013).

Why is that? It starts with the relative installed bases of these devices – everyone has at least one desktop / laptop. Second, the browser environment remains the easiest to measure, such as demos, purchase intent, conversion rate. Other platforms are quickly catching up, but desktop / laptops had a head-start. Lastly, when we venture into the world of mobile and OTT devices – we are talking about dozens (if not hundreds) of new technical integrations, which brings new challenges in both launching and maintaining new platforms. Offerings like server-side stitching are likely to speed up the pace here, but there is still a ways to go in building scalability across all these different devices and operating systems.

What publishers can do today is to focus on what they can control. Take stock of how your inventory is spread across your device footprint – publishers that do this well understand sell-through, effective CPMs and delivery rates across all their environments. Best practice publishers have also created a balance between selling Run of Network buys that can deliver into any device environment and more targeted buys with an associated CPM lift. From a more operational stand-point, it also means tracking many creative file types - FLVs, m3U8s - and making sure they are ready to go at the start of any campaign. Finally, while each new device can bring added complexity, it can also mean huge upticks in inventory – so the best cross-platform publishers are adding new devices to their networks every quarter.

What is the right ad load to maximize inventory and viewer retention?

From our Video Monetization Report, we see on average about four ads per break and an average break length of about a minute and 40 seconds. Those metrics are still low relative to TV standards and we see continued opportunity for growth. But what is the right ad load? The short answer is that there is no one-size fits all ad load.

Best practice publishers often set many different commercial break patterns, accounting for: different content (maybe five ads per break for brand new shows and teo for library?), different devices (maybe few ads for mobile users who are on the go) and locations (more ads on the home page than on “hubs” deep in the site architecture).

Where are key pain-points in sales, planning, trafficking and yield management processes?

When we think about workflow, we think about all the steps from “pitch to pay,” meaning from the time the Sales team is fielding an RFP or talking to a warm lead up until the time the client sends the check. We break the workflow down into two types of functions: (1) Transactional: steps to get one campaign through the entire process and (2) Portfolio: strategic / operational analysis of all lines and inventory to drive bigger picture business decisions.

Scaling a video business will bring about many challenges in the workflow, particularly for companies that have historically been structured to manage display or linear TV businesses (which applies to most publishers). Video is a different animal in that inventory tends to be scarce and the margin of error for not monetizing impressions becomes a lot higher.

In general, what we have seen is that most video businesses have built out pretty reliable transactional workflows. They can effectively build media plans, traffic creative and track line-item level delivery and identify risk areas and then invoice the client. Where a lot of the pain-points surface is on incorporating the portfolio steps. Most notably:

Forecasting – Knowing what you have to sell is the first step. There is often a focus on understanding top-level capacity and sell-through, which is a good start. Where problems can develop is if certain pockets of inventory are oversold while others are undersold. An effective forecasting organization has broken out sell-through and tracks pipeline across all key inventory segments (e.g., by device, content type, demo). The second step is regular communication with sales / planning teams on when to “close out” a segment or to push harder in sales efforts. This comes down to effective reporting and communication of the big picture – which is a key focus for a Yield Management or Inventory team. Companies that do this well are using all available data and ensuring that it is visible across the workflow (and not just to the people making the reports).

Delivery management – This is the “middle” of the workflow and an area that is typically pushed on to Ad Operations / Technology teams in a very reactive way. “My line is under-pacing! Why?” “My client doesn’t like the metrics he is seeing!” Effective delivery management requires integrating proactive analysis of all inventory and delivery trends. Most specifically – are upstream steps in the pre-sales process causing delivery issues? Are we selling too much geo-targeting? Too granular show-level targeting? What is driving under-delivery (technical issues, late starts, being oversold)?

We largely see that systemic under-delivery tends to happen most frequently when you are oversold (either across your network or in one inventory pool) – but reaching that conclusion means having a portfolio level view of your inventory and how it performs. Like forecasting, it also comes down to data visibility and creating executive level dashboards / reports that enable tactical decision making.

Yield management – The last pain-point area we typically see is around yield management. Simply put: how do I optimize pricing and sell-through to maximize my revenue? In general, this is less of a pain-point and more of a step that typically becomes an afterthought. Because a lot of premium publishers have scarce inventory, they are likely to be in sold-out situations, so the concept of lowering price to drive sell-through is a little less important. Where yield management is coming up a lot more now is in finding ways to optimize for: (1) Demo buys: increase match rates on demo-targeted campaigns, (2) Inventory spikes: take advantage of temporary spikes in inventory (e.g., breaking news, big sports matches) and (3) undersold inventory: platforms / content that might be more difficult to sell (e.g., library content, certain devices).

Brian Dutt serves as director of advisory services, overseeing FreeWheel’s Business Advisory division providing strategic and operational guidance to clients in building scalable and profitable digital video businesses.

Video

More from Video

View all

Trending

Industry insights

View all
Add your own content +