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Writing the Next Chapter in Online Video Monetization

After a dozen years in the advertising industry, looking back I remember the first few chapters of online video being written, as more and more content began to make it onto the Internet. A few years later the same online video content was starting to be accessed on mobile devices, and I was trying to pitch a partnership with a video ad network; a couple of executives at the online advertising network I worked at were very skeptical, calling it a fad that will never take off. I remember one saying, "I would never watch a video on a small screen; there's no way this will capture people's attention." 

At that time, people didn't realize how many new handheld devices with different capabilities, screen sizes, and formats would start to emerge and take over the consumer market. They had no idea how these devices would change people's viewing habits, in turn affecting the many content providers and publishers to scramble to produce, publish, and repurpose existing TV content. There were very few advertising agencies that understood online video advertising, and if they did, they would include video ads along with their primary request of banner ads as a nice to have or a bonus in the RFI/RFP. Video advertising CPMs were all over the place because there was very little video content, no standards, and limited tracking, so monetization was not taken very seriously. 

Today, the projection for 2015 is that the monetization of digital video will reach $1.81 billion dollars more than last year, totaling almost $6 billion, standardization is on its way, and tracking is already taking shape. Additionally, people's behavior has changed, viewing all types of content online, long form and short form, content made for TV as well as online specific content. With that change, their expectations are growing as they demand to access content from anywhere, and on any device. 

As I write this, the next chapter of online advertising is being written. Online content has now exploded largely due to significantly improved bandwidth in many countries, handhelds come in hundreds of flavors, and TV's with 4K UHD are everywhere. Audiences expect to press play and instantly stream their content at the highest quality, with fast start-up times, little to no re-buffering, and a seamless transition between ads and content for the best viewing experience! All of this is of course is creating a new level of complexity. Content providers and publishers are trying to figure out how to make sure they can monetize all their online content across different devices, whether they are hand held or set-top boxes. 

According to Troy Dreier's article in Streaming Media, The State of Online Video Advertising 2015, "... the online video market is at tipping point ... Advertising agencies that specialize in online video enjoyed a pretty solid 2014. Not only were sales up, but the most talked-about advertising videos all started online." He also writes "Advertisers couldn't get enough of live events in 2014. From concerts to sports, live events were booming online, and advertisers wanted to be a part of it in order to guarantee placement in front of an engaged and passionate fan base and to make sure their ads were viewed...The FIFA World Cup was an advertising bonanza, both for branded videos created to capture the enthusiasm of the games and for ads inserted into the games' live streams." 

He goes on to say, "For many, the endgame in online video advertising is reaching parity with TV advertising....but the online video ad world is still very much a kid brother to TV. Before online gets the same kind of ad spending as TV, it will need to get the same kind of viewership."
All these points are extremely valid and undoubtedly are both the driving force behind the growth of online video advertising, as well as the limiting factors. However, they only focus on the front end business side, and don't take into account the backend technology needed to be in place to drive success and perhaps parity with TV advertising. 

What is needed in the industry to get the same kind of TV viewership? It's all about new innovations in technology and infrastructure. Innovation and technology that will support scaling the increasing live and on-demand content accessed from around the world, like the Olympics, the World Cup, and just recently, March Madness. The backend technology takes into account all the different devices that consumers are buying and all the different quality viewing expectations viewers now are demanding. The innovations that address content providers, broadcasters, and advertisers looking to broaden their reach to all audiences online, and monetize all video content at the highest quality, with a simplified workflow, and across different platforms.

Akamai, just announced a new partnership with Adobe Primetime at NAB and introduced a new feature to Media Delivery of Adaptive Bitrate Streaming, called Ad Scaler. The Ad Scaler feature enables the integration of Adobe's Primetime ad insertion capabilities into the Akamai network, helping to simplify and improve how online video ads are delivered across devices. The combination forms a server-side advertising insertion solution that leverages the scale of Akamai's global content delivery network with the reach of Adobe Primetime and its ad insertion technology. Server-side ad insertion offers numerous benefits to advertisers, content providers and consumers, including:
  • Monetization of TV online with specific opportunities across devices and platforms
  • Increased reliability and limitless scale for linear, broadcast-size audiences 
  • Increased device-reach with faster time to market reaching more audiences than ever
  • High-quality viewing experiences that audiences have come to expect by delivering seamlessly stitched dynamic advertising at the same bitrate as the content, with fast start-up times and no buffering
  • Greater resiliency to ad blocking, ensuring every dollar advertisers spend reaches their target market 
  • Greater operational visibility through online video analytics that measures and tracks all relevant metrics 
  • The joint solution includes Akamai's client-side beaconing, and the server-side ad insertion Adobe Primetime is providing ad location stitching independent of the location of the beaconing. The joint solution also provides server-side beaconing for flexibility and does not imply server-side tracking, so the end result is a solution that is expected to be fully MRC compliant.

Akamai is in the midst of helping write the next chapter in online video advertising with its new innovations and unmatched scale, improving advertiser's ability to efficiently buy targeted online advertising that reaches many viewers around the world at the same quality as TV. Stay Tuned.

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Noreen Hafez is a senior product marketing manager at Akamai.