Last week TubeMogul released the first in a quarterly series focusing on real-time video advertising trends, TubeMogul finds real-time video advertising is growing rapidly in the UK, with prices falling as inventory expands, and with weekends being the optimal time to buy.
Key findings from the report include:
- RTB Video Growing
Pre-roll video advertising inventory available for real-time buying is expanding rapidly, growing 13.8% per month in the second quarter of 2012 and topping 29.9 million streams per day in July.
- CPMs Declining
Reflecting expanded inventory, CPMs declined to £4.97 in the second quarter from £6.47 in the first quarter of 2012.
- Optimal Time to Buy
Weekends are a relative bargain to video advertisers, representing 29.4% of the week’s video viewing but having the lowest prevailing CPMs at £5.40.
ExchangeWire caught up with John Hughes, President of Products at TubeMogul, to dig a bit deeper and see what this means for the future of video RTB.
What does the report ultimately tell us regarding the state of Video RTB in the UK?
The big picture is growth. Pre-roll inventory available for brand marketers to choose from is growing rapidly at 13.8% per month and averaging 29.8 million streams per day in July. This is three times the rate of growth in the US. The prevailing wisdom that viewing is low on weekends also appears to be wrong, making it a great time to buy.
When it comes to performance, we see that context and ad placement play a key role in getting viewers to watch an ad to its completion. Larger video players also make a big difference in terms of completion rates, whilst surprisingly comScore site rank does not.
Do you see varying differences in the data between the US and UK markets?
The UK appears to still be in a hyper growth phase as marketers adopt the medium. Inventory growth is outpacing the US and CPMs are still finding market equilibrium. But viewing patterns and clickthrough rates do not vary significantly between the countries.
Are there fewer bidders currently integrated into YouTube in the UK versus the US? Given YouTube is a major source of UK real time inventory, would this have an impact on the amount of demand being seen on this inventory, and thus perhaps a reason for low CPMs, ie low demand on the biggest supply source(s)?
The fact that demand is increasing for YouTube inventory globally makes it less likely this is the main reason for the short-run dip in CPMs. Clients still include hand-picked YouTube channels on most of their media plans.
In the UK (and indeed the rest of Europe) the markets seems extremely supply-constrained in terms of quality and long-form content and publishers are anxious about RTB. Is this study, and the overarching message, that CPMs are dropping quarter-on-quarter the right message to convey to stimulate more quality liquidity?
Since our model and pricing are transparent, we always present the data as it is. The price dip appears to be a short-run phenomenon. In the last week of Q2, prices were back up to £6.39 CPM overall.
The fact that inventory is not changeable and brand advertisers care about context first and foremost actually benefits real-time buying since marketers can precisely control sites, audiences and budget at all times during a campaign, which was never possible before (contrast this with the bundled site lists offered elsewhere, where assessment is often done quarter-by-quarter).
The report also points out that tier one and two content garnered higher CPMs than long tail or niche sites, which we take as a sign the market is heading towards equilibrium.
Do you think we will realistically see mass adoption of video RTB (with the inclusion of the much-coveted brand spend) without access to the quality long-form content that seems to capture the largest percentage of spend?
That is obviously an ongoing concern, but not as much as most people think. Tier one inventory (which includes major broadcasters, officially-streamed music videos, sports broadcasts and major news outlets) accounts for 8,104,309 (27%) of the pre-roll streams per day in the UK. This figure is growing with private exchanges promising to open even more long-form inventory. Shorter-form videos, it should be noted, do not necessarily mean less premium content. Music videos, news clips, sports highlights and the like all perform well in terms of brand lift.
What is TubeMogul doing to engage with broadcasters around RTB? Or is this not a challenge for you to solve?
TubeMogul and its inventory partners currently work with a wide variety of broadcasters. The company also launched its own private exchange offering last year (here is a white paper published on the subject).
What functionality does TubeMogul provide for buyers to access non-RTB inventory? How much of a technological challenge does it represent to make upfronted/guaranteed/reserved inventory programmatic?
We are primarily focused on real-time inventory because we believe it provides the best outcomes in terms of branding and ROI and enables the most flexibility for optimisation. We do partner with certain premium inventory sources on a non-RTB basis where the inventory is specifically desired by a set of our clients. Real-time bidding is difficult for publishers to build in-house (requiring millisecond-decisioning), but luckily any publisher has a selection of partners who can help, including ourselves or supply-side leaders like LiveRail or Spotxchange that have best-in-class technologies.Global Desk Editor