BusinessInsider.com - Online Video Advertising Provider Videology Is On Track To Hit $300 Million In Revenue This Year

Videology CEO Scott Ferber says his company is "on track to approach" $300 million in revenue this year, a sizeable jump from the $100 million the company reported two years ago. 

Videology CEO - Scott Ferber

Videology is an online video advertising provider that caters to buyers, sellers, and clients. The company works with big agency holding companies including WPP and Publicis, as well as big publishers like Yahoo! JAPAN.

It's also one of the few big private players left in the video ad tech space.

The company has raised $130 million in funding to date and has expanded its operation from three countries in 2011 to 28 countries today. Ferber says more than half of the company's nearly $300 million revenue is now coming from outside of the US.

Ferber says one of the best ways his company has been able to get such a huge reach, internationally, is to become integrated with the rest of the ad tech world. Videology says it is integrated with roughly 50% of the ad tech space, or at least half of Terry Kawaja's video LUMAscape chart.

Videology also says that 50% of its revenue is coming from TV buying groups, not digital buyers, even though the company is not selling them traditional, linear TV spots. Of that, Ferber says 90% of all buys are done on a reserved basis with premium inventory, similarly to how TV is purchased.

Simply put, people would rather pay for their ad to run on high-quality site and know they are guaranteed a certain number of clicks or impressions. People prefer certainty over the game of bidding and chance.

Ferber also confirms that the company is still preparing for an IPO in the near future. Ferber recently told Business Insider Videology was looking to go public in 2015, and that is, most likely, still the case. 




"We are fortunately privileged in the sense that we have the luxury to time it when we feel is best from the market and company perspective," Ferber says. "But our goal is to be prepared to literally go at any time we feel the market is right."

Full Article at Business Insider

45% of Agency Clients Plan More Digital Video Advertising

by Jack Loechner, September 9, 2014, 7:15 AM 

A recent survey of media buying agencies, conducted by Strata, found that 45% of those polled are more interested in digital/online video than they were a year ago, while streaming/online radio saw a 53% increase. Overall, 67% of agencies said that their clients’ primary focus for campaigns is video advertising (including traditional TV, cable, and network, as well as digital video).

Client Interest in Advertising on Streaming/Online Video

• More than last year (45%)
• Same as last year (49%)
• Less than last year (6%)

72% of agencies said their clients are interested in advertising on YouTube, up 5% from last year. HULU followed at 36%, a 32% jump from 3Q13. Despite the strong growth for digital video, agencies still question the value of online video ads. 47% said they are fairly confident they are getting a good value for their money in recent digital video ad purchases, while 40% say they are unsure, says the report.

Driven by television along with digital advertising, the overall ad economy is strong, as 62% of agencies say their business is increasing this quarter compared to the same time last year, says the report. Spot TV continues to be the top source for advertisers, as 55% say their clients are the most interested in that medium, the largest percentage in 22 quarters of the survey. For spot radio, 13% of agencies responded that that medium is receiving the most interest, up 32% from a year ago. 

Client Media Interest (Areas Focused On, Q2 September 2014)
Media Focus	% of Respondents
Spot TV/Cable	56.3%
Internet/digital	21.9
Spot radio	12.5
Network TV	4.7
Print	3.1
Network cable	1.6
Out-of-home	0.0
Source: Strata, September 2014

Joy Baer, president of STRATA, says “… our agencies continue to ask for better ways to buy digital video advertising… long-form digital video content increasingly mirrors the 30-second TV ad experience… blurring the lines between devices… “

39% of agencies are still undecided as to whether they trust programmatic to carry out their media buying, while an equal amount of agencies believe that programmatic buying is effective in reaching their clients’ target audiences. The most popular form of programmatic buying, according to agencies, is digital, with a third of agencies polled stating they use programmatic to purchase their digital ads.

More key findings from the study:

• 89% of the respondents plan on using Facebook in client campaigns, which is the third highest number in the STRATA Survey since 2008. YouTube (53%), Twitter (50%), LinkedIn (36%) and Pinterest (32%) followed 
• Pinterest had the largest year-to-year growth, jumping up 31% over 2Q13
• 51% project the second half of 2014 to be better than the first half, up 19% from the second quarter of 2013
• 31% are less interested in Out of Home advertising than a year ago, the largest percentage since 2008 

For additional information from STRATA, please visit here.

Click here for MediaPost article.

Spotify Now Showing Video Advertising

The Swedish-based streaming music service today launched two video advertising products. The first allows brands to buy 15- or 30-second video “takeover” ad breaks on its desktop platform. The second (and arguably more interesting one) allows mobile users to opt in and subject themselves to 30-second video commercials, in exchange for 30 minutes of free listening.

It remains to be seen how users will respond to the new ads. But it makes perfect sense for Spotify to explore using them. Online video is one of the fastest growing segments of the advertising industry. Jefferies Equity Research expects online video ad spending to hit $10 billion next year. Video advertising is more effective and less commoditized than other forms of online advertising, so in theory it should command higher rates.

It also makes sense for Spotify, potentially readying itself for an IPO, to explore new ways to monetize its free user base, which at last count stood at around 30 million. (Another 10 million users pay about $10 a month for an ad-free experience.) Spotify has never confirmed or even commented on any plans for an initial public offering, but this year, the company established a credit facility with investment banks, sought to hire compliance professionals, and even hosted practice earnings calls.

There is at least one more reason why Spotify’s foray into video advertising is intriguing.

The biggest streaming music service of them all (according to no less an authority than Spotify’s CEO, Daniel Ek) actually is YouTube. For years, people have used the Google-owned video upload site as a de-facto free streaming music service, creating playlists of film clips to play back and listen to. YouTube is now reportedly edging toward the launch of a full-fledged streaming audio service (with both free and subscription-based tiers) that would be a direct challenge to Spotify.

WRITTEN BY
John McDuling
@jmcduling

See full article from Quartz 

With The Launch Of iPhone 6, Mobile Video Advertising Could Skyrocket

As rumor and speculation build around the new iPhone 6, we in the mobile industry can hardly wait for Apple’s announcement on Sept. 9.

The new iPhone is rumored to come with a larger screen size, higher resolution and faster processors, all of which will be a boon for the mobile video market. The iPhone 6 will also come with the iOS 8 operating system, with more than 4,000 developer APIs.

How might each purported feature impact app developers and marketers?

The Ultimate Media Consumption Device

When the iPhone 5 was released in 2012, it was clear that Apple was willing to adapt its iPhone design based on changing consumer behavior and competitive pressures. Apple’s own research shows most of the growth in the smartphone market is coming from larger screen devices. It is likely that Apple is again going to bump up the screen size from a 4-inch diagonal screen size, possibly to 4.7 inches and 5.5 inches with new iPhones.

Though the exact screen resolutions to expect have been a matter of heated debate within the industry, we can bet there will be a dramatic increase in the iPhone 6 screen resolution relative to its predecessor. This will lead to sharper and denser screens, which will result in a dramatically improved end-user experience for media consumption, including photos and videos.

With consumers spending most of their time with media on mobile apps, it would be a smart and strategic move by Apple to position iPhone 6 as the ultimate media consumption device.

Bigger, Better Screens

More than 40% of YouTube’s traffic comes from mobile devices. Combined with the iPhone 6 upgrade cycle, bigger and sharper screens, and growing consumer adoption of mobile video, I believe the new iPhone will catalyze the growing mobile video advertising market.

Video advertising platform TubeMogul recently reported a big increase in mobile video auctions on its platform. Mobile video advertising is growing rapidly, but is still a nascent market compared to banner ads and interstitials.

Here is how I think iPhone 6 can make a big impact on the market and make it mainstream: 

• App developers will get rid of banner ads and instead move to bigger ad units such as video, interstitials and native ads to take advantage of the larger screen size in iPhone 6. 
• Video, interstitials and native ad units’ CPMs and click-through rates are already 10 times more effective than banners and we expect them to be even better with bigger screen sizes. 
• Larger screens will provide a bigger palette for creative agencies and brands to convey their message as opposed to banner ads. 
• Fifteen or 30-second videos on mobile provide an ideal environment for a brand to connect with a consumer. 

As app developers get ready to update their apps for iOS 8 and iPhone 6 screen sizes, they should definitely consider ad units, such as video and interstitials, that enhance user experience as well as significantly increase monetization potential. Video advertising, especially on a 4-inch-plus screen, will make banner ads a thing of the past. 

All in all, Apple’s long-awaited iPhone 6 and iOS 8 release couldn’t come at a better time. With the rumored faster processors and larger, higher-resolution screens, the new iPhone could usher in a golden era of consumer media consumption that both developers and brands should leverage.

Follow Ash Kumar (@ashwani), TapSense (@tapsense) and AdExchanger (@adexchanger) on Twitter.

Over 90% Of Buyers Using Programmatic, Per AOL Survey

According to a new study from AOL, 76% of advertisers buy display via programmatic, while 56% buy mobile inventory this way; 48% use programmatic for video ads; 24% for social; 32% for search; and 13% for television. Just 8% say they aren’t using programmatic in any channel.

From the agency perspective, 86% are buying display via programmatic, 60% for mobile and video, 34% for social, 24% for search, 7% for television and just 9% aren’t using it at all.

In other words, over 90% of buyers are now using programmatic in some capacity.

Although it is already prevalent in all digital media channels, agency and brand respondents said advertisers will increase the use of programmatic buying over the next six months. The expected growth is nothing to scoff at: Respondents said advertisers will increase the use of programmatic in display by 58% over the next six months -- by 53% in mobile, 54% in video, 18% in social, 12% in TV and 10% in search.

AOL notes: “87% of brands and agencies plan to increase spend in Display and Video up to 50% in the next year.”

“What started as a way to automate real-time bidding on remnant inventory has evolved into a force for innovation across numerous areas of the advertising landscape, including the trading of premium display and videos buys,” Allie Kline, chief marketing officer of AOL Platforms, told Real-Time Daily. “Programmatic is moving out of the minor leagues.”

Ad technology is not without its faults, however, and brands, agencies and publishers all agree that inventory quality is a serious concern. It has been a known and documented issue for months now, and still progress has been slow, if not absent.

“Inventory quality” is one of the top two challenges that brands, agencies and publishers all face with programmatic -- with agencies and publishers citing is as their biggest hurdle. For brands, the number one issue is transparency, followed by inventory quality and technology complexity. Transparency and technology complexity are the second and third biggest challenges for agencies.

Publishers, on the other hand, don’t cite transparency as an issue -- instead noting that education and measurement are their second and third biggest challenges, respectively.

While the “technology complexity” is a major problem, according to the survey, advertisers aren’t doing themselves many favors. AOL’s survey says that 73% of buyers are working with up to 20 different vendors.

“This shows that while consolidation may be happening at a corporate level, the effects of it have not yet trickled down to the transactional level, requiring numerous partners throughout the process,” AOL theorizes.

The complexity can perhaps be blamed for another complaint buyers and sellers share: Nearly 60% of all respondents say digital media buying and selling is still too time consuming.

READ FULL ARTICLE BY MEDIAPOST

Are We All Doing YouTube Preroll wrong?

Here is Nail's blurb about the dog video:

As marketers, it's time we change the way we do YouTube preroll.

The current model seems to be to simply throw your TV commercial in front of any video a loosely defined demographic happens to be watching.

What a missed opportunity. The skip rates are unbelievable (94 percent is a generous estimate). And when there is no skip button, you can practically feel the resentment oozing through the Internet. Hardly the temperament most brands want to inspire from their customers, right?

.....

YouTube ads should be designed for YouTube. They should use the tools and features given to us and interact with the user and the platform in a way that can't be rivaled. They should be self-aware. They should talk to one person at a time.

What the heck are we talking about, you ask?

OK, here's an example. We wanted to raise awareness and money for an organization near and dear to us: the ASPCA. We had virtually no money but had given ourselves a serious challenge: can we make a skippable YouTube that virtually no one skips?

Did we do it? You tell us."

Iframing - The VAST Problem Of Video Viewability

Remember the scene in the movie "Kill Bill, Vol. 2" where the vengeful heroine, the Bride, is buried alive in a coffin and has to pound her way out with her bare fists? That’s your video ad.

Click Here for Full Article on AdExchanger

It’s essentially trapped in a box and buried in the publisher’s web page, and whether it can get out and reveal any metrics to the advertiser depends on whether it can bash through the various impediments blocking it from the surface.

A VPAID In The VAST

Even if the video ad can crack through the iframe, it still needs to crack through the player, and this creates another issue. The problem, points out Pieter Mees, CEO of Zentrick, is that “most video doesn’t have the infrastructure to run code.” This makes it difficult to run interactive video – Zentrick produces a tool that enables the creation of interactive video – and analytics.

Consequently the ability to gather any salient metrics, not just those related to viewability, depends largely on the publisher's video integration methodology. If the video was integrated using only the Video Ad-Serving Template (VAST), then marketers might as well dump their video ads into a titanium box for all the visibility they’ll get. VAST video placements, according to Kandi Onwuama, Extreme Reach’s VP of software architecture, don’t allow third-party tech vendors or advertisers to apply viewability technologies.

CBS Makes Up to 20% More Ad Revenue Online Than TV per Viewer: Research Chief

Click Here for Full Article on Variety
CBS, like every other TV network, is seeing audiences increasingly shift to Internet viewing of programming — and that’s been a good thing for the Eye, according to chief research officer David F. Poltrack.
“We actually make more money per viewer streaming than we do on television,” Poltrack said Tuesday at the 2014 Media & Entertainment Industry Forum in New York, presented by the IESE Business School and Variety. “If you stream our programming online, you’re seeing a full complement of advertising – you can’t bypass it.”
On average, CBS generates 10% to 20% more ad dollars per viewer from Internet-streamed programs than TV. Poltrack expects that to differential to increase even more later in 2014 because of a dearth of inventory for premium video online: “There’s been a flight to quality this year. Demand for our online video is through the roof.”

For CBS shows streamed online, such as “The Good Wife” (pictured, above), viewers can’t fast-forward through the ads. That also means that brand recall and recognition rates are higher for Internet video than TV, Poltrack said.
Of course, one of the big reasons ad rates for premium Internet-streamed video are higher than TV is because the online audiences are smaller – and hence, harder to reach. Online audiences also skew toward younger viewers, which are a more desirable target for marketers.
In addition, TV ad spending is far greater than digital-video advertising today, although the Internet segment is growing as a faster rate (from a smaller base). TV advertising in the U.S. will grow 3.3% in 2014 to $68.54 billion, while digital-video ad spending will increase 41.9% to reach $5.96 billion, according to a recent study from eMarketer.
According to Poltrack, the top 30 TV programs today overall have the same size audience as the top 30 in 2000. The difference today, he said, is that “it’s just not all on the television set in the living room.”
The majority of TV viewing is still live on television, but it’s been shrinking. In the first quarter of 2014, 80% of TV viewing was live, compared with 89% in 2011 among adults 18 and older, according to Nielsen data.
Poltrack, as he’s inclined to do, discounted pundits who have predicted that the rise of Internet video will damage the TV biz. In a December survey commissioned by CBS, 28% of respondents said they were watching more TV than  a year earlier, while 55% said their viewing was about the same and 17% said they were watching less.
Up until recently, consumers were more likely to say they were watching less television, in spite of the fact that Nielsen data showed time spent viewing TV was increasing. “It used to be a more ‘socially correct’ statement to say you were watching less television,” Poltrack said. “Today, I would argue, it’s ‘socially correct’ to say you’re watching more television.”
As for the trend of younger consumers watching less television, Poltrack said that’s been a recurring theme over the past 40 years. “The reason (younger people) watch less TV is because they are not home as much — and as we get older, we spend more time at home,” he said.

Todd Spangler

NY Digital Editor@xpangler