While online video continues to grow, it's becoming less certain that media buyers are ready to shift their focus demonstrably away from primetime TV. That's not to say companies in the video space aren't trying to make the movement between PC, mobile and TV screens more seamless.
"We're seeing single-digit ad dollars starting to move from TV to digital video," said AOL CEO Tim Armstrong during a Q&A at New York's Advertising Week. "Two years ago, a lot of people met to talk about TV/online video convergence -- but it was just talk, no action. That's changed this year."
For AOL, which recently completed its $405 million acquisition of online video marketplace operator Adap.tv, and is hosting a "programmatic upfront" on Monday evening to showcase its various offerings to agencies and marketers, it's about putting the right pieces in place to capture what Armstrong said could potentially unlock $100 million in spending within the next few years. To capture marketers attention now, AOL and Adap.tv, along with companies like video ad network Tremor Video, which filed its IPO this summer, are hoping to position themselves in front of thousands of advertisers this week as the company to make the connection between traditional TV and digital.
There are reasons for media buyers' resistance when it comes to shifting budgets to online video. But those reasons are starting to look anachronistic. According to Nielsen's "Cross-Platform" report, digital video comprises a mere 2.3% of total TV viewing. And while online video is estimated to take $4.1 billion in ad dollars in 2013, video analytics provider Visible Measures recently noted that from 2012 to 2013, traditional TV spend will rise by 2.8%, in comparison to digital video, where spending is expected to jump 42.4%. Plus, citing the Nielsen cross-platform report, Visible Measures added that time spent “watching video on the Internet” grew 36.9% year over year.
In addition to trying to establish a simple marketplace option with Adap.tv to connect buyers and sellers of video across screens, AOL has also been building on relationships it struck last spring with MediaOcean and FreeWheel to help support the back-end software for automated deal-making and negotiations, along with partnering with Nielsen to bring the TV standard of Gross Ratings Points to online video in a more direct apples-to-apples comparison.
Targeting TV buys: On Monday, Adap.tv executives told the audience at the IAB Mixx conference that its recently expanded demand-side platform, Audience Path, would now support TV buys as well as mobile.
Not to be outdone, Tremor Video introduced its DSP, VideoHub Connect, in a bid to help solidify its programmatic offerings. It should be noted that since Tremor created VideoHub as a buy-side analytics tool two years, the company has been able to identify itself as a marketplace, not just an ad network. But those buy-side features only went so far. Some might question what took Tremor so long, but there's an argument that it wasn't worth the investment then as much as now.
"Our approach to the video space for buyers and planners has been to lead with analytics, because that's the value of campaigns -- knowing what will work and what did work," said Anthony Risicato, VideoHub's GM. "It's not just about getting a video ad from point A to point B. The bottom line is, what is the marketer getting out of that spend? That's what makes the difference when it comes to how video budgets get allocated."
Still, being able to take action on those analytics rather than ceding that operation to another video ad-tech company was clearly required for VideoHub and Tremor to grow. In that sense, adding a full DSP function to VideoHub is a natural progression, Risicato said. It also reflects a sense in the marketplace that while real-time bidding for video is increasingly important, the notion of buying and selling media programmatically can encompass more than that. A year ago, perhaps, there was still confusion in the marketplace around RTB and programmatic, Risicato said. But there's a lot more clarity on what the terms mean and how long-term brand campaigns can also be bought and planned programmatically.
"The buying engine, VideoHub Connect, allowed marketers and agencies to buy on a bidded basis, though they're not limited to just that," he said. "The new feature leapfrogs over the idea that marketers only want the most reach at the cheapest price from programmatic ad sales. The platform can reflect the full spectrum of buyers' needs, now that they're ready."