We all know that video is engaging, informative, and easily digestible. Video ad spending will reach $37.4 billion in 2021 (a 12.5% year-over-year growth). This data from Forbes illustrates why video should always be a priority for both the buy and sell sides.
It’s not surprising that spending on video advertising is projected to have an annual growth rate of 5.1% in the period between 2021 and 2025, which would result in a market volume of $45.5 billion by 2025. Video will make up about 82% of consumer internet traffic by 2022 and mobile will account for 73% of video ad spending by 2024.
Have you ever found yourself watching video after video? You’re not the only one and I find myself doing it too. By 2022, video marketing will make up approximately 82% of consumer internet traffic due to consumers preferring video over other formats.
Google is Rewriting its Policies on Video
While you’re reading this, I remind you to form an opinion of your own and thoroughly come to a conclusion for yourself just like I did. After an analysis and many discussions with both publishers and advertisers, my suspicions were confirmed about Google’s policies rewriting video advertising and its negative impact on publishers and advertisers. It’s a topic that hasn’t received much attention and in my opinion, it needs to be addressed before it’s too late.
If you don’t know what I’m referring to, Google has changed their policy on outstream video, establishing their own format called “display out-stream video.” It serves through Google Ad Exchange’s native display formatting and styles. Many refer to this as in-banner video, as it’s served from a display ad unit in either a standard IAB banner size or fluid.
This change is resulting in video campaigns having the same CPM rates as traditional display (as they’re now bundled together), which devalues video inventory and low fill rates for advertisers who are bidding at the same rates used for display.
Advertisers perceive this to be in-banner video with another name at a lower price. Publishers are concerned that without a difference in CPM rates between display and display out-stream video, video revenue and the value of a video impression will be diluted such that the benefits do not outweigh the cost (page load time, immersive ad experience which is potentially distracting their audience).
“Display out-stream video” preferred deal proposal at a $3 CPM:
Preferred Deal Display Proposal at a $3.00 CPM:
Google has also changed their policy so as to restrict all AdX outstream video originating from a Google GPT for video tag as part of MCM, thus forcing publishers to adopt these new standardization of video as display inventory, otherwise lose the revenue from AdX/OB demand.
Outstream video provides some of the best user experiences and most immersive ad experiences. It’s often just as effective as instream video when used correctly.
Why Does This Matter for Publishers?
Publishers are no longer able to serve outstream video into their own in-content and in-feed players which have higher viewability, greater VCR, and more advanced player functionality that can facilitate the insertion into highly viewable positions on the page. They’ve diluted the value of outstream video to that of display and given publishers no other options.
If publishers want to reap the benefits of AdX’s high volume of video demand for outstream, you can no longer have it compete with other demand partners since it’s now in a native template which can’t be served through a mediation platform like SpringServe.
Why Does This Matter for Advertisers?
Advertisers are now forced to either pay for what Google defines as instream (a far more scarce type of inventory) or wittingly or unwittingly pay for what they think is video as it’s always been but is really in-banner video served through standard display placements that most publishers don’t have configured.
Advertisers are losing out on the most engaging, immersive ad experiences such as a video ad before an online game or finance calculator loads, to name a few examples. These don’t fall under instream but provide just as much value if not more to both the buyer and seller.
What’s Next?
Publishers are not powerless in maintaining the value of their outstream video inventory. While header bidding was initially developed for display inventory, video header bidding, known as Prebid for Video, has been gaining momentum since first launched in 2016 by AppNexus.
Prebid Video is open source and built for compatibility with multiple video players, ad servers, and demand sources. In Q4 of this year, I’ve seen publishers achieving $8-10 CPMs with fill rates upwards of 50% on their outstream video inventory which is achieved through various applications of header bidding for video which effectively forces competition against Google AdX demand.
The best way to voice your opposition to Google’s video policies is by leveraging video ad technology which aggregates video demand partners and runs them in competition against Google AdX’s video demand. Additionally, explore creative ways to floor native inventory at higher rates by targeting the specific ad units or placements which are configured to serve AdX Display Out-stream Video demand.