The great video - and ad - migration is here
This post was written by Paula Minardi, content strategy manager at Ooyala.
The old axiom "dollars follow eyeballs" is more complex now than it's ever been.
Every quarter, our Ooyala Global Video Index tracks the video behaviors of viewing audiences across our customer base, whose collective audience of over 220 million people provide us with deep insights into how content providers and advertisers are pivoting to reach them. With the release of our Q2 2016 report, it's clear that the great video (and ad) migration away from linear television is happening all around us.
We've been charting the pace of mobile consumption growth for as long as we've been publishing our report. As we've been expecting for the past five quarters, video views on tablets and smartphones now make up more than half - 50.6% to be exact - of all video views. That's 15% higher than it was a year ago, 203% more than in Q2 2014, and 346% more than in Q2 2012.
How viewers watch television isn't the only thing that's changing. Brands increasingly are going online to reach consumers, especially younger ones, who have trended away from traditional TV viewing. Magna Global in May announced plans to move $250 million in traditional linear TV spending to YouTube. Why? Traditional TV just isn't being watched as much. It's being subsumed by online video.
Programmatic will drive revenue
The migration of capital is expected to accelerate over the next few years, with eMarketer forecasting digital ad spend to surpass TV by 2017 in the United States.
Much of the shift in distribution dollars is expected to be driven by programmatic trading, a more efficient and effective method of reaching large-scale audiences wherever they are. eMarketer expects U.S. programmatic to grow at a compound annual growth rate exceeding 143% through 2018 as the technology's benefits, including ease of transactions and its ability to target audiences, become better known. Just in Q2, Ooyala saw open market real-time bidding (RTB) deals - which make up about 50% of the programmatic spend - increase 50% since Q1 2016.
While all regions are seeing some expansion in the supply of premium content inventory available to programmatic buyers, our index noted that it was most pronounced in northern and southern Europe, where programmatic markets are more established. This global shift indicates that more brands are becoming comfortable with programmatic. Ad agencies know they can use the technology to reach specific groups of users for their brands, and have begun to deliver more high-quality advertising content.
Data will seal the deal
The real-time nature of programmatic, with all of the digital data and personalization capabilities that come along with it, helps ensure consumers aren't forced to watch the same ad for a product over and over again - a major sticking point for them. Publishers with AVOD models can harness data for better insights when it comes to serving ads and content, such as the top days for viewer engagement (Wednesday is generally big for news sites), and what kind of ad loads they will tolerate. This all makes it more likely that audiences will stick around to watch ads to completion and publishers will grow CPMs and revenue.
As the industry continues the shift towards automated ad transactions with data at their core, we do expect to see standalone programmatic platforms give way to a more integrated technology. This technology provides optimal consumer targeting and personalization, with visibility across all sales channels (both direct sold and programmatic) in a single holistic platform combining programmatic and ad serving.
Offering premium, personalized video and ad content optimized across screens promises to be the best way to satisfy viewers and maximize monetization, as the great video (and ad) migration continues.
For more insights, download Ooyala's Q2 2016 Global Video Index report.
This post is sponsored by Ooyala. Content written and provided by Ooyala.
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