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  5. > In-Stream Video Advertising 101: Inventory Abundance, Execution Headaches

Brands, marketers, agencies and adtech vendors--collectively the demand side--have all clamored for more premium in-stream ad inventory, and in 2015 the supply side is unlocking some 296 billion avails, though ad op growing pains persist.

Media execs too, for their part, are determined that IP premium television be monetized in similar fashion to linear clock counterparts across all platforms, further contributing to unit volume increases (in-stream formats), exhibiting a CAGR of 47.3% 2003 – 2014.

Despite pain points, spend is forecast at $4.8 billion (U.S. in-stream only) during the calendar year, with internet pure plays owning 56% of the market, broadcasters/cable programmers 36.5%, aggregation platforms 6% and print/magazine publishers 1.4%.

However, throwing an IP video ad across today’s diverse assortment devices of and media environments (i.e. Live to VOD) is complex and viewers are increasingly unforgiving.

Integration of linear and on-demand systems inside the organization is still early stage: linear and on-demand content management groups are just beginning to work in tandem to bring a unified workflow process to cross-channel monetization.

Ongoing digital video advertising playback and performance research conducted through AvailPlay Video Monitoring Services by AccuStream Research, with latest results and analysis contained in the industry trade resource In-Stream Video Advertising 101: Inventory Abundance, Execution Headaches, indicates better integrated workflow is necessary to create a unified, seamless content/advertising output that delivers a satisfying audience viewing experience on par with TV.

As demand has spiked, the fluid state of video ad technology adoption (i.e. make, buy, license or outsource) underscores the fact that monetization management systems deployed have often been pieced together over time, and while functional--if not optimal--may be deemed too expensive to upgrade or replace at this stage of the industry’s evolution.

“Frankenstein” digital video advertising technology workflow (ingest to multi-bitrate formatting, integration with multiple ad servers, video tech platforms and audience data warehouses) and various iterations of adtech media management deployments contribute to:

- Less audience patience with playback issues, higher content abandonment rates making fewer guaranteed impressions

- Impression fatigue: The same piece of creative running multiple times inside deployed ad pods populating a program

- Inexact audience forecasting tools which can alternatively underestimate or over-estimate inventory

- Ad units or executions (pods, apps, pre-roll or post-roll) that do not play, freeze, render properly, stuttering, halting or inconsistent playback

- Mobile/desktop ad calls that result in app freezing, device crashes or blank/black screens

- Site serving video creative across infrastructure not architected to handle the format

- Ad pods that may appear but are in some cases not sold/empty, alternately freezing when the creative isn’t there to play, turning into a black or blank screen

- Video ad playback breakage that does not properly failover to HTML5 encoded files

- Constant re-buffering

- VOD programming (authenticated through a set top box) is undersold, which leads to running repetitive creative, or impression fatigue

- Authenticated sign-in is still challenging, content is limited, very few programs are actually live, all operators are not supported, and video content/ad stitching is poorly integrated and playback is inconsistent

At this stage in the market’s evolution, the desktop remains the most exploited screen/platform, in aggregate. For example, YouTube desktop insertion frequencies averaged 27.6% over the past year, 60% TrueView enabled. Conversely, mobile/tablet insertion frequencies averaged 6.7%, with 77% TrueView units deployed.

This in-stream advertising resource provides detailed spend perspective: total views, sellout percent, CPMs, insertion frequencies by site (desktop, apps), UGC to premium broadcast sites, number of ad pods supporting Authenticated Sign-in, and units allocated inside those pods, playability, viewability, where frequency caps are enabled, where they aren’t.

The pre-roll/-in-stream video format is an essential monetization vehicle for premium cross-channel broadcast television, cable programming, large internet pure-play publishers and aggregators such as YouTube, Yahoo, NDN, Hulu, MSN/Microsoft, Crackle, large UGC outlets (i.e. DailyMotion) and smaller independent publishers and affiliated network sites.

3rd Party ad networks and clearing solutions (including public programmatic systems) are expected to manage 13.4% of total in-stream spend.
Additional market intelligence contained in this industry trade resource reveals in-stream video inventory is averaging an eCPM of $19.58, including YouTube.
Desktop sales generated $3 billion in spend, while non-desktop/devices/VOD sales totaled up $1 billion, capturing 25.8% of the market in 2014.
Excluding YouTube and Facebook, mobile/non-desktop video spend jumped 323.9% in 2014 to $719.8 million
A 30-minute show (i.e. 22 minutes as defined by a linear television clock) is monetized with 6 – 10 minutes of in-stream/online advertising time, broken up into 3 – 4 pods, each pod with 1 – 7 ad units/avails of varying spot length.
Turner Entertainment properties including TBS.com and TNT.tv, Discovery channels, NBC Universal, CBS and ABC are monetizing with in-stream ad loads at linear broadcast television levels. Long-form episodes typically see 3 – 7 ad pods, with 1 – 7 ads per pod.
YouTube leads all publishers with in-stream video ad billings. CBS.com, ComedyCentral.com, NBC.com, ABC.com ESPN.com are top performing in the premium broadcast/cross channel video publishing category.
For broadcasters, we estimate about 31.6% of total segment video ad spend was placed on screens other than the desktop in 2014.

Table Of Contents

In-Stream Video Advertising 101: Inventory Abundance, Execution Headaches
IN-STREAM VIDEO ADTECH/ADVERTISING TERMINOLOGY AND DEFINITIONS 1
SECTION ONE 8
SHARPENING THE 2015 - 2017 IN-STREAM VIDEO ADVERTISING BIG PICTURE: LINEAR BROADCAST TELEVISION AD LOADS HAVE ARRIVED--WITH GROWING PAINS 8
AN ADUNDANCE OF IN-STREAM INVENTORY HAS CONTRIBUTED TO UNEVEN DIGITAL AD PLAYBACK: THE “FRANKENSTEIN” WORKFLOW FACTOR 9
Audience reaction to poor content playback affects ad spend 11
Suggested Fixes to execution headaches include larger libraries, better navigation, hiring digital media ad sales and adtech specialists 11
Insertion frequencies rise across the ecosystem: UGC to Premium long-form 12
3rd Party IP Video AdTech: Addressing the In-stream playback disconnect 14
IP VIDEO IN-STREAM INVENTORY AND MEDIA SPEND PERFORMANCE 2015 - 2017: DOUBLE DIGIT CAGRs 17
IP IN-STREAM VIDEO INVENTORY FORECAST AT 295 BILLION AVAILS IN 2015; SPEND AT $4 BILLION 18
IN-STREAM VIDEO SPEND EXPECTED TO OUTPLACE INVENTORY EXPANSION THROUGH 2017 21
PREMIUM PUBLISHERS CONTINUE TO INCREASE IP VIDEO AD LOADS BEYOND THE LINEAR CLOCK 25
IN-STREAM VIDEO CPM PRICING: 2007 - 2015 26
THE EVOLUTION AND MATURATION OF YOUTUBE IN-STREAM ADVERTISING: 2009 - 2015 27
YOUTUBE EXHIBITS HIGHER IN-STREAM INSERTION FREQUENCIES ON THE DESKTOP, LOWER ALLOCATION OF SKIPPABLE INVENTORY 28
SECTION TWO 33
DIGITAL VIDEO ADVERTISING AVAILS AND MEDIA SPEND OVERVIEW: TOTAL IN-STREAM VIDEO SPEND IMPROVED BY 23.4% IN 2014, NON-DESKTOP BY 261.4% 33
IP VIDEO ADVERTISING: VIEWS, CPMs AND MEDIA SPEND BY SITE/PROGRAMMER: 2014 (Full-Year) 40
IP VIDEO ADVERTISING: VIEWS, DESKTOP/MOBILE INSERTION FREQUENCIES, INVENTORY BY SITE/PROGRAMMER: 2014 (Full-Year) 45
SECTION THREE 49
INTERNET PURE-PLAY PUBLISHERS, WEBSITE DESTINATIONS CAPTURE 56.1% OF IN-STREAM DIGITAL VIDEO AD SPEND 49
IP VIDEO MEDIA SPEND RANKING BY PUBLISHER CATEGORY: 2014 49
IP VIDEO ADVERTISING: RANKED BY INSERTION FREQUENCY: 2014 (Full-Year) 51
YOUTUBE DESKTOP, HULU, AOL, FACEBOOK, THE BROADCASTERS AND CABLE CHANNELS ARE IN-STREAM VIDEO ADVERTISING MARKET SHARE LEADERS 54
CBS, NBC, ABC, TURNER, ESPN AND DISCOVERY LEAD THE BROADCAST/CABLE CROSS-PLATFORM SEGMENT IN DIGITAL VIDEO ADVERTISING REVENUE 62
IP VIDEO ADVERTISING: RANKED BY BROADCAST/CROSS-CHANNEL VIDEO PUBLISHER: 2014 (Full-Year) 62
IP VIDEO ADVERTISING: RANKED BY INTERNET PURE-PLAY VIDEO PUBLISHER: 2014 (Full-Year) 64
NYTIMES.COM, WSJ.COM, WASHINGTONPOST.COM AND TIME DIGITAL LEAD PRINT PUBLISHER SEGMENT WITH IN-STREAM VIDEO ADVERTISING 67
NDN IS THE LARGEST SYNDICATION PLATFORM DELIVERING IN-STREAM VIDEO AD SPEND 68

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