TubeMogul has taken its quest to be the world's real-time media buying platform for video advertising to Canada, and yesterday threw open the doors of its Toronto office. Based in Emeryville, CA, TubeMogul now also offices in New York, London, Sydney, Detroit, Chicago and Los Angeles. TubeMogul explains that that real-time video advertising is exploding in Canada, with inventory available for buying growing at a rate of 9.3% per month, or over 19.2 million pre-roll streams per day in the first few weeks of July. TubeMogul has operated in the country under a private beta with, it claims, dozens of Fortune 500 brands and top trading desks for the past few months.
TubeMogul, founded in 2006, claims to be "the only video marketing company built for branding." By integrating real-time media buying, ad serving, targeting optimization and brand measurement into its PlayTime platform, TubeMogul aims to simplify the delivery of video ads and maximizes the impact of every dollar spent by brand marketers.
Digital Video A Brand Marketer’s "Dream Format"
TubeMogul in April commissioned Forrester Consulting to evaluate the brand marketing opportunity provided by real-time bidding (RTB)-enabled video, and to compare it with other forms of broad-based video buying (e.g., through ad entworks). Forrester interviewed several video buyers to find strong support for RTB video as a brand-building mechanism, but also found that the video RTB ecosystem is in its infancy.
Forrester found that "in an ecosystem long dominated by the lowly display banner…the emergence of digital video advertising formats over the last several years has been a game changer for brand marketers," who are no longer reluctant to commit to the untested mechanism. Forrester expects video advertising expected to reach $5.4 billion by 2016, a 250% increase over 2011, and representing 5% of traditional TV spending.
Forrester observed three reasons why video is appealing to brand marketers:
First, consumer behavior is in flux as to how, where, and when they consume digital content and advertising: Consumers are now watching an average of 21 hours of digital video per month across a range of connected devices.
Second, video "feels an awful lot like TV," hence the move to online TV (like original programming from Netflix) and TV metrics, like gross ratings points (GRP) for digital video. As one trading desk executive explained the appeal to brand marketers, "Digital video [is] the closest thing to TV. It’s got sight, sound, and motion…10MM people watched my ad from start to finish. And when you compare video CPMs to TV it’s a no-brainer."
In fact, digital video advertising can be equally or more effective than TV, say 64% of advertisers responding to a BrightRoll survey released in June 2012. An even greater proportion see digital video as equally or more effective than display (87%) and social media (69%). Digital video’s effectiveness appears to be driven by its targeting capabilities, which 43% cite as its most valuable aspect. As a result, the use of behavioral targeting by agencies in online video campaigns will increase by 24% this year, with two-thirds saying that more than 40% of their online video ads will be behaviorally targeted.
TubeMogul and Forrester observe that video's rich format is more of an "eyecatcher," versus static display in communicating brand messages. As an agency explained the appeal, "You can convey emotion, which is easier when conveying a complex message to audiences." So video suffers none of the "banner blindness." And, depending how it is presented the viewer can't scroll away from it; can't skip it; and has to watch the pre-roll to get to the content (e.g., on Hulu, which guarantees 96% ad completion).
The Benefits Of Video RTB
TubeMogul believes that video RTB provides increased granularity; whereas the traditional ad network model of packaging and selling impressions in bundles of 1,000, and charging a flat cost-per-thousand impressions (CPM) for all of them, limits the ad buyers’ ability to estimate the value of any given impression in the bundle, RTB enables buyers to evaluate each impression granularly. "We can use our own data to evaluate impressions and get the right person at the right time," as one put it.
RTB provides greater fluidity as well, says Forrester and TubeMogul. "The days of annual, quarterly, or even monthly insertion orders, where buyers and sellers alike adopt a 'set it and forget it' approach to media management and optimization, are waning." The more search-like model of RTB and demand-side platforms (DSPs) wherein budgets are fluid across placements is on the increase.
RTB and DSPs improve efficiency as well, claims TubeMogul, by cutting out middle-men like video ad networks. As a publisher who sources RTB video inventory on behalf of its clients observes, "The difference between network and RTB inventory can be $13-$14 versus $9-$10, which is substantial."