The future of ads in a 5G world? Verizon Media's monster shows where video could go next

Covering the most powerful media companies to the smartest startups, former Independent media editor Ian Burrell examines the fraught problem of how news is funded today. Follow Ian @iburrell.

A purple-headed cartoon monster by the name of HypeZilla is an unlikely symbol of the future of advertising.

But the animated host of an eponymous show which launched this year on the Yahoo Play mobile app has emerged as an ambassador of cutting-edge production techniques that will become available to brands in a 5G world.

To his primary audience, HypeZilla is a high-energy personal shopper who helps viewers to sample newly released streetwear products using augmented reality (AR) technology.

But he also struts his stuff in front of ad clients of Verizon Media, the conglomerate that owns both Yahoo and Ryot, the groundbreaking Los Angeles-based studio that created HypeZilla. “We take them out there to actually begin to educate and inspire them with what we are doing here and now with 5G production,” says Anna Watkins, Verizon Media’s UK managing director.

Ryot made its name as a pioneer of 360 and virtual reality filming. It was acquired in 2016 by HuffPost, another segment of the Verizon Media empire. Ryot's visionary co-founder Bryn Mooser left the studio last year but its futuristic Ryot Lab facility has become a world leader in developing the video potential of 5G and other emerging technologies.

HypeZilla behaves with great realism because he is being played by a human actor – Benjamin Abiola – wired up in a motion capture suit that instantly translates his movements to those of the character, designed by Ryot art director Patrick Ian Moss, a former animator for DreamWorks.

“We showed our clients the actor in real time and immediately he was animated as HypeZilla and it was being streamed live across Yahoo,” Watkins says of a recent trip to LA. The group also watched a troupe of dancers depicted as animated mice. “Those things really blew their minds – that was when clients began to see in real time the step change that 5G will enable.”

It’s a “game-changer”, she says, because 5G connectivity will reduce the cost and timeframe of production techniques which were previously the realm of big film studios. Animated scenes which once took companies like Disney weeks to produce can now be made in seconds. “Because of the data transfer speeds, the time and the cost of making this incredible immersive content comes right down and therefore becomes accessible to brands.”

Ryot has a team in London that produces branded content campaigns. “It’s irrelevant where the studio sits because, with the (5G) data transfer speeds, the clients can work with Ryot here in the UK and we are working with the LA 5G production team to create new 5G experiences right here and right now.”

Watkins oversees a portfolio of news, entertainment and technology media brands with a combined UK monthly reach of 41.6 million. Alongside its “flagship” properties HuffPost and Yahoo, Verizon Media owns the TechCrunch and Engadget sites, and has signed new partnership deals with Microsoft and Apple to boost its capacity for serving premium native ads.

Under global chief executive Hans Vestberg, Verizon is comprised of three pillars: the consumer-focused US telco operation (America’s second biggest, after AT&T, with 118 million subscribers), the business division (which manages technology infrastructure for business and government clients, including 99% of Fortune 500 companies) and the media division. The latter was known as Oath until January when it rebranded to Verizon Media in a signal of closer ties with the rest of the company.

Verizon Business UK, based in Reading, recently relocated some of its staff to Verizon Media’s offices in London’s Holborn. The move, Watkins says, points to the “future vision” of Verizon in the UK, where the media and business divisions work “hand in hand”.

The gradual rollout of 5G across UK cities and towns continues to be delivered by EE, Vodafone, O2 and Three.

While Verizon has no plans to enter the UK telecoms market as a network provider, it is looking to leverage the expertise it has gained in introducing 5G connectivity to 14 of America’s most iconic sports stadiums, including Soldier Field, home of the Chicago Bears, and the MetLife Stadium, shared by the New York Giants and the New York Jets. It has been able to offer fans and brands immersive content features including on-demand instant replays and seat location tools.

Verizon aims to take a greater share of the UK advertising pie by exploiting its strength as a global conglomerate at the intersection of technological innovation and audience scale.

It has a cutting edge video studio in its Holborn building, which it uses to make branded content and editorial shows such as Yahoo!’s ‘Tailgate’ (a UK perspective on American sports) and ‘Global Change Agents’ (a Yahoo Finance UK show on female entrepreneurs).

Watkins says the company’s strategy includes new investment in Yahoo which has grown to 8 million email users in the UK following the launch of the Yahoo Mail 6 model, which includes personalisation features such as the ability to filter mails by subject.

The London studio is also used by HuffPost and Watkins says that’s a sign of how the news brand benefits from being part of a media conglomerate, as opposed to the VC-backed digital pure-play news outlets that have struggled to find sustainable models. As part of Verizon Media, HuffPost benefits from programmatic income it would not have as a standalone business.

Native advertising is central to Verizon Media’s focus. In October it signed a deal with Apple to serve premium native programmatic ads in the Apple News and Stocks app in the UK, Australia and Canada. Content can run in-feed, in-stream or between articles. It has a partnership with Microsoft to serve native ads on Microsoft news platforms. Verizon wants to be “the home of premium native inventory”, Watkins says. “We are redefining native as being a really premium experience for consumers.”

The Microsoft partnership extends to Xbox and Watkins identifies growth in gaming and eSports via mobile phones as a key media trend for 2020. “You will be able to play these games and to access the power of the console remotely. These things are going to game-change consumer behaviour and brands will want to ensure they are engaging.”

She also points to the potential for the automotive industry to make greater use of AR content within vehicles, such as by turning the back window into an in-car entertainment system.

In all these areas, she says, Verizon Media is well-placed to work with brands, largely because of Ryot's expertise in immersive media.

In September Verizon Media worked with Vodafone to create a Pokémon Go-style AR game that scattered blockchain tokens around London and encouraged players to collect them and win an iPhone. The stunt generated a frenzy of interest. “We had 25,000 people trying to pick up these tokens, and on Twitter we actually outstripped coverage of the Rugby World Cup,” Watkins says.

She is currently “on the road”, touring 20 media agencies with a message that 5G will transform advertising, allowing brands to consider bold production techniques previously beyond their means. “We say: ‘It’s shifting from a 2D world to a 3D world.’”

Ian Burrell's column, The News Business, is published on The Drum each Thursday. Follow Ian on Twitter @iburrell

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