Friday, September 18, 2015

Is This Admageddon ?

Sorry for the dreadful pun, but is this the week when we can say that the online advertising industry truly changed for the better ?

Let's look at the situation. If you want to build and run an online video or television service and want to support it through advertising you have two choices: you can build a YouTube channel and get a paltry revenue share on the ads they sell or you can build your own channel and use a tool like DfP or a platform such as AdX to serve your video and companion ads. As you probably know, YouTube, DfP and AdX are all owned by Google, so this is a virtual monopoly in markets like the UK despite the aggressive moves being made by Facebook, Yahoo!, AOL and others.

Of course other ad networks are available, but they will only engage at volume. And by volume I'm talking about millions of impressions.

So, if you're starting out with a video service, then everything is stacked against you, especially if you're a specialised channel. We're typically seeing revenues of under $4 per thousand viewers for pre-rolls on highly targeted video sites across Google properties. This just isn't commercial.

The reason for these low rates are that Google doesn't care about your content. It just cares about the eyeballs you are delivering. Online advertising is far more interested in blitzing users with the same ads over and over whatever site or channel they visit based on 'profiling', which is, at best, dubious.

So, what changed this week ? Well, Apple has enabled ad blockers on its Safari browser (but not on its own News service nor on the Facebook app on iOS incidentally). Initially this may seem to be very bad news for channel operators and publishers dependant on ad revenue, but I have a different opinion.

First of all, there were sites I actively avoid because the sheer weight of advertising has rendered them unusable, particularly on tablets. It's not just the serving of the ad, but the tens of different calls that are made before an ad is rendered. The appropriately named Peace is the number one iOS app on the Apple Store already for good reason - it works very well. Pages on some news sites are now loading ten times quicker for me and actually fit into the viewing area on the tablet.

And if you wondered why those pages were so slow even on your sooper duper fibre connection, this is why:
Each ad is going through a tortuous process before reaching you, the viewer.


So, getting rid of this jumbled is good news for the viewer or user and this should actually  improve engagement with the content.

A second reason to welcome the changes is that publishers will need to start looking beyond the easy sources of low revenue available from Google and start to become more proactive: consequently, this should have the result of opening up the advertising ecosystem to new and more interesting players.

Thirdly, the implementation of video ad tags using the VAST and VPLAY 'standards' have been technically unimpressive: they are horribly fiddle to implement and they really shouldn't be. So this is an opportunity to implement simpler alternatives.

And we shouldn't forget they guys paying for all of this. There is a mounting body of evidence that ads, and video ads in particular, are billed to advertisers even though they're never played (or played properly). The current system is hardly accountable in any meaningful way.

There is a very basic and very obvious solution to all of this: channels with small audiences should go native and serve up their own ads. It's time for a marketplace where they can set up specific profiles and advertisers can bid directly for very narrow audiences just as they would book traditional magazine advertising. Selling mountain bikes in Manchester, then book mountain bike and local channels and sites for your ads. I suspect the results would be better for the publisher, the advertiser and the viewer.