Home The Sell Sider After The Pivot To Video, Publishers Must Find A Way To Monetize

After The Pivot To Video, Publishers Must Find A Way To Monetize

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The Sell Sider” is a column written by the sell side of the digital media community.

Today’s column is written by Justin Festa, chief digital officer at LittleThings.

It seems inevitable that publishers will at some point take a crack at video. With its high CPMs and promise to reach more readers, the move is understandable.

But as I outlined in my last column, the pivot to video is rife with challenges and often fails. Once they are able to produce content, publishers are faced with the obstacles of monetizing it.

Despite this, I am very optimistic about the industry pivot and think publishers moving toward more video is a good thing. However, I think all publishers are different and need to follow the data, move slowly and evaluate how video fits into their organizational goals, rather than just following the trends.

As I previously mentioned, the cost of video can be prohibitive. At one point, traditionally ad networks would waterfall opportunities, and most publishers just used one or two video supply-side platforms (SSPs) to deliver all their pre-roll ads, with most big publishers directly selling 100% of their inventory. However, as more video inventory comes online, people are increasingly turning to programmatic.

But the open market is not yet where it needs to be here. The market does not fully value click-to-play viewable inventory. This is in part because of bad actors making in-banner and outstream ads look like in-stream, middlemen and domain spoofing. (Please add Ads.txt to your site!) This is a short-term problem that I see mostly resolving itself over the next six to 12 months, but in the interim, it’s difficult to get the rates required to justify all the video costs.

There is a ton of video that is already being produced and is available for publishers to license. I suggest that any publishers looking to focus on video should go out and license a few. There are companies that will provide the video, player and monetization.

This is a great way for publishers to test if they can get people to click on the videos and spend time watching. Measure everything: What is the average play-per-page view rate, how long do people spend watching the video, and what is the bounce rate on video articles?

This only works for so long, though. For a next step, I would recommend only licensing the videos. Publishers should see if they have the technical expertise to set up their own player, get their own ads to play and control the entire experience.

This will allow publishers to refine the user experience and have complete control over their offering. With this, publishers can start to understand the infrastructure costs of running video before layering in the actual video production costs. This is a good, difficult test and the area in which I see many publishers start to struggle.

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If publishers can make everything work this far, I would then start to think about original video. What stories can a company better tell through video? What types of videos will resonate with an audience?

I strongly suggest publishers at this stage find a way to understand the true cost and value for each video. Different types of videos will attract different audiences and different play rates and have different cost structures and advertising rates.

If publishers have a sales team, what types of videos are they able to sell, and what is their feedback from the industry? Publishers without a sales team can just dig into the programmatic numbers. Understanding profitability per video genre is crucial in making sure publishers don’t make broad assumptions about their video strategies and will allow them maximize efficiency.

When measuring video revenue, publishers should not discount the impact the page setup and user experience can have on video revenue. If executed correctly, clicking play should be one of the highest-value actions a user can take on the page. Having a slowly loading site or stuffing banners above the video may seem like a good idea, but publishers are likely to reduce the number of video views and their overall revenue.

There is also industry pushback against intrusive “high-impact” advertising, but I think this is even more pronounced when there is video on the page. Ad tech companies used to love interstitials because of their incredibly high click-through rate, but if you have a video on the page, every user that clicks out on an interstitial is not clicking play on the video. You are producing a lower-quality experience and earning less money.

Finally, never stop learning and optimizing. This isn’t a one-time pivot that puts publishers on a straight line to higher profitability – it’s a change in the way we interact with audiences and will only continue evolving.

Publishers must keep putting the user first and never stop testing new ideas. There are so many interesting things happening in this space with video, so publishers must ensure they are capitalizing on those that make sense for their organization.

Follow LittleThings (@LittleThingsUSA) and AdExchanger (@adexchanger) on Twitter.

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