Streaming Video Services Attempt to Solve the Monetization Puzzle
It’s all about live, and the first piece of advice is, keep production values high. “Consumers are pretty savvy, and they may not be able to articulate bad quality from good quality, but they know it,” says Mason. While lower production values may not work well, what does work is finding a social media partner to help build an audience.
Social media platforms like Facebook, Twitter, YouTube, and Twitch have sales staff deeply versed in what it takes to run live broadcasts online. “At South by Southwest, we did 3 days of shows for Mashable. They were 90-minute shows each day, so they were pretty big productions,” says Mason. “It was a partnership with Twitter, and [Twitter has] the ad sales team with the expertise to sell that type of content sponsorship and to help drive an audience and get access to the Twittersphere.”
Social platforms are looking for compelling coverage to differentiate their platform, and not just compelling content, but sequential broadcasts. “I would say a distributor likes reoccurring events,” says Mason. “Key sponsors also like to find repeatable, regularly scheduled events to start building their brand sponsorship around, versus a one-off event.”
Next piece of advice: The early bird gets the worm. Plan events with plenty of time to let social media and sponsors start early marketing campaigns. Ideally, Broadcast Management Group likes to plan a couple of years in advance. “They want to have time to promote the event to drive the audience,” says Mason. “When people start 4 to 6 months before an event, it becomes very very challenging.”
During event broadcasts, Mason monitors what’s trending for his content. “We use HubSpot; you install it on the back end and it provides tracking for engagement. We’re able to see what people are responding to. Then we can adjust things if something isn’t resonating with viewers. This feedback enables them to respond in near real time to make editorial changes on the fly.”
In terms of measurements that matter, the KPIs that advertisers want are similar regardless of what type of event you’re broadcasting: who and how many people are watching, how engaged they are, and how long are they watching. “This drives your cost for what you’re able to sell your spot for,” says Mason.
Broadcast Management Group delivers live tentpole events as well as linear live channels for corporations such as TD Ameritrade. CEO Todd Mason emphasizes the importance of leveraging social media platforms to reach the widest possible audience.
Go Big, Go Local
“Local markets are adopting OTT. For example, we found that in 2017, OTT was 2 percent of the total video product mix, and in 2018, OTT was 68 percent,” says Aman Sareen, CEO of advertising platform ZypMedia, which has been in business for 5 years. “We have seen a major shift in the way traditional media companies view the value of digital media. When we first launched, we only offered digital video advertising solutions, but we’ve since grown our offering to include a variety of display options and targetable OTT.”
Previously, advertising in local markets would have gone to newspapers, radio, TV, direct mail, and outdoors. Now small and medium businesses are finding the ability to advertise where local broadcasts can swap out broadcast ads for local ads. This growing trend should benefit consumers, because they are getting relevant local advertising shown to them rather than the same national brand ad over and over again. The question becomes whether local advertising for events or furniture sales can actually create sustainable online business in local media.
“The linear revenue model works. That’s why TV works. And you can make seven-figure revenue on a four-figure audience,” says Guy Tasaka, general manager, mobile, at GateHouse Media. “I see the big players like YouTube and Hulu moving toward a linear model. The engagement with linear is better than VOD. If you own linear and you own that ad spot in linear, that’s where the real money is.
“The reason the newspaper model worked for so long is you linearly took someone from page one to two to three to four to five,” Tasaka says. “You had to run people past all the ads. It’s why linear radio works, it’s why linear TV works—everything is about linear. Once we started breaking the world into chunks, whether it’s podcasts, VOD, content shared via social, it’s one and done.”
What are the issues with advertising in the linear, lean-back model? “Measurement standards are still being defined, and because of this, there is a lack of industry standards which makes consistent targeting and reporting universal across all offerings,” says Sareen. “Also, OTT technology and targeting capabilities are still catching up to digital methods.” The good news is, even if the analytics and standards are still evolving, ads follow Video Ad Serving Template (VAST) standards, which is a favorite topic of our next expert.
Video-First Design
As the media field has changed, many smaller companies have started putting video online, but these publishers could still use some help understanding what the consumer wants. Basing his comments on the thousands of conversation he has had with customers, Brian Rifkin, co-founder and SVP of strategic partnerships at JW Player, has some advice for newer entrants into the video field.
“It’s very rare that a website is built in a video-first manner,” he says. Many companies don’t think through how consumers want to interact with video, he says. “In order to implement video right, you really need to build a page that’s videocentric, and that’s harder to do than taking a video player and inserting it on a page that’s already been built.” Plus, introducing video where previously there was none can be off-putting. Giving customers some notice by email about future video usage on a site can go a long way toward getting users into the new video focus. “[You could say] ‘We’re going to start creating video content, the articles aren’t going away, but video’s now a part of our site’,” says Rifkin.
Good sites have very little else but video on a page, making it the center of focus. That focus generally includes advertising. “Remember, subscriptions are single-digit percentages of take rates,” says Rankin. “Just looking at that number, you realize there’s a lot to monetize via advertising. [Deciding between subscription- vs. ad-supported strategies] gets infinitely harder the smaller you are, because there’s only so many subscriptions consumers can take.”
An equally challenging task is handling ad operations for the publisher, says Rifkin. “They may have ad operations, but their ad ops teams may not be really experienced in video,” he says. There are companies getting into ad operations to help provide the expertise publishers need. “There’s one that I like called Ezoic, and they take it to a whole other level where they’ll actually move things around on your site and... rearrange your site, so the layout’s actually optimized.”
For companies handing the ad ops themselves, the complexity of ad serving is the biggest monetization challenge Rifkin sees. “I would say what’s working well for online video are creatives delivered with a minimum amount of VPAID [Video Player-Ad Interface Definition],” he says, referring to the standard that VAST replaced. “Everybody’s wrapping these creatives in VPAID after VPAID after VPAID. The more VPAID you add, the higher the probability that you’re going to have errors.”
Try to counter the amount of nested VPAID calls, and if possible go to VAST 4.0, where the measurement and verification is being done outside of the tag. “If you have private direct deals set up with your advertisers and they’re using VPAID [and you have a good, trustworthy relationship], approach them and ask them if they’d be interested in starting to use VAST-only creatives,” says Rifkin.
That’s a Wrap
Digital media in general, and video in particular, truly has become a vast landscape, but in some ways, the more things change, the more they remain the same. In the 1970s, about one-fifth of U.S. homes had 10 or more media subscriptions, so while the format has changed to digital, the number is roughly the same. In fact, when adjusted for today’s dollars, the spend hasn’t changed much, either, according to the aforementioned Deloitte “Digital Media” report. The challenge for publishers is how to become either one of the 10 media subscriptions or the ad-supported destination viewers go to.
Compelling niche content has brought Ellation success. Being pre-installed on today’s TVs has given Xumo a de facto place in consumers’ living rooms. FandangoNow has content Amazon and Netflix don’t have, and draws on its extensive retail experience to keep consumers buying from its sites. Local, live, and newer video entrants all face the challenge of letting viewers know about their unique content offerings while ensuring the ads delivered are well-targeted (and obviously don’t cause playback issues).
The ability to gain insights from all of the data that viewers are generating will continue to bring success to those companies that are agile enough to be able to find a niche and then keep listening to viewers about what they want.
The biggest difference today is that, while consumers still might prefer a lean-back experience, they now tell publishers what their likes and dislikes are. Companies that want to keep their customers happy will listen to that feedback.
[This article appears in the October 2018 issue of Streaming Media magazine as "Solving the Monetization Puzzle."]
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