Digital video series: What is the future of online video advertising and will it take over from TV?

The Drum catches up with a cross-section of the online video industry to discuss the evolution of online video advertising.

As part of The Drum’s latest digital media supplement, focused on the opportunities of online video, we are publishing a series of articles exploring a range of topics, from how to produce effective branded content to the challenges of video real-time bidding.The supplement will be published next Friday, 25 October.In today’s article, we ask: What is the future of online video advertising and will it take over from TV?Nick Reid, UK managing director, TubeMogul Video is not so much taking over TV as it is merging with it. Every day, agency trading desks like IPG Mediabrands and Xaxis are using software like ours to buy ads that appear on TV content – the difference is the content is now streamed on computers, tablets and more. Nielsen Online Campaign Ratings gives agencies a way to make direct comparisons to TV, and products like our own BrandPoint help them act on that reporting. Eventually, we expect broadcast TV to be bought and sold via software. Advertisers are seeing the benefits of automated buying with VOD and it won't be long before they start demanding its use elsewhere.Leon Siotis, director, media and publisher services, BrightRollThe future of digital video is multi-screen and programmatic. We are rapidly moving towards being able to effectively reach a consumer on whatever screen they are using at any given time. However, in order to achieve this, advertisers need to be buying their media programmatically and centralising the decision-making process.As for whether digital video will take over from TV, I think digital video is more likely to take budget spend away from other mediums, such as print, outdoor or digital display, rather than TV. Ultimately, I don’t see it as digital vs TV, rather video vs everyone else.Our recent 2013 UK Digital Video Advertising report gives a clear indication of where things are headed in this space.Peter Browse, creative technologist, Beattie McGuinness Bungay As with any development within advertising, including the future of online video advertising, it depends on the audience. If the audience move into an area, so do advertisers.The future of online advertising is intertwined with how the video on demand (VOD) market develops. This will be the single highest drive behind the development of online video advertising, and could see it take the majority hold away from TV. I don't believe however, that TV will ever stray too far from the centre of campaigns, as it can still draw large crowds and produce high volumes of impressions from a marketing perspective.Alan Fagan, group sales director, EMEA, ESPNWe are at the very beginning and are only just getting started. We will see significant innovation in formats, leading to greater engagement and impact for advertisers online. Online video does, and will continue to, present advertisers with the best way to stand out online and is best placed to be the dominant online revenue source for publishers who have access to unique, compelling and relevant content. With increases in time shifted viewing, video advertising is rapidly becoming a valuable new revenue stream for TV companies. However, online video advertising will not overtake TV advertising, as TV continues to deliver the highest engagement, reach and impact. New platforms, technologies and behaviours are leading to greater overall consumption of media and our experience is that they are adding to time spent watching TV, not cannibalising. TV continues to be the best way to reach mass audiences and delivering high impact, but online and mobile video are very strong compliments to it.Steve Doyle, European commercial director, InSkin Media and IAB Video Council chairman TV will always have its place, but will come under increasing pressure to become more accountable, especially with the advent of connected TV. The introduction of online GRPs into the digital lexicon demonstrates a shift in the way that digital marketers are approaching video advertising, and targeting TV budgets.It is essential to understand that they are different mediums, using similar ad formats, that should be complementary to one other, like any other type of media. Users’ behaviours differ by device and by environment. Companies that understand this, and recognise future market fragmentations in their plans, will prosper. Brian Fitzpatrick, managing director Europe, Adap.tvThe future of online video advertising will focus on addressable media – the ability to target people based on their age, gender and interests. Although online will not take over from traditional TV, increased use of connected televisions and set top boxes, along with smarter TV technologies, will result in more targeting taking place. The winner will be the player that can generate the most efficiency – providing the right message to the right audience at the best price. Linear TV’s issue of wastage, which is currently still the norm, will become less acceptable over time.Steve Chester, director of data and industry programmes, IABUltimately consumer demand and behavior will decide how and when video/TV content is consumed and we as marketers will need to adapt to that. There is no doubt that the proliferation of different devices including mobile phones, tablets, living room entertainment systems, connected TVs, to name a few, are fundamentally changing how people access and engage with TV and video content. How quickly these changes occur is difficult to predict. However what is and will always remain true is that consumers will always be interested in high quality entertaining content regardless of its source and delivery mechanic.Barry Lee, managing director, PerformicsData will define the future of video advertising, playing a role before, during and after ads are seen by the consumer. We’ll move further away from simply buying environments and focus on our specific audience and the story we tell to them. We will be creating a more effective dialogue and gaining a far deeper understanding of our viewing audience. Online video won’t take over from traditional TV per se, it’s not simply a case of one medium replacing another. What we will see is a convergence of video media as it’s accessed through an ever increasing range of devices, it will be driven by data and differentiated by the context, not the environment in which it is viewed.Gavin Morgan, VP, business development, Europe, InnovidThe future of online video is now. Rather than take over from TV, online video advertising and TV will unite forces and become one. The usage of multiple screens is evolving into one unified cross-screen experience. The personalisation that advertisers are used to in the online world will sync with TV advertising. We are adding interactivity to video/TV advertising being viewed through connected devices on the large TV screen in the living room – Playstation 3 and Roku being good examples of this. Additionally there are interesting second screen opportunities that can link with on demand and linear TV, so there's a lot of activity in this area. Tom Pepper, UK sales director, Vibrant Media and a member of the IAB Video CouncilWith constantly improving streaming capabilities on smartphone and tablet devices, including rising 4G network subscriptions, consumers are watching video content on more than just their TV. The ability to watch video content on numerous devices will continue the growth of online video advertising. What’s more, as consumers are plugging their digital devices into TVs to watch online video content, they’re also seeing online video ads on the biggest screen in their homes. However, taking over from TV advertising is a way off yet. In the short term online and offline planning and buying will continue the process of convergence. Part of this process is that both TV and online video mediums need to learn from each other. Traditional TV has to keep up with the tracking and targeting capabilities of online video technologies. The online video advertising sector has to find metrics that attract the attention of the TV planners and buyers who make their decisions on gross ratings points.Rebecca Mahony, CMO, EbuzzingOnline video advertising won’t kill TV, although as more and more content is viewed on smart TVs there will obviously be a shift. Video actually has the opportunity to complement TV as people can download video content to their phone that allows them to interact with TV programming. Online video advertising will grow into a whole new area of creativity, which we have already seen the forerunners of this year with Vine and Instagram.Video image courtesy of Shutterstock