Out-Stream Is an Ad Exchange with a Spin on It: Q&A with Kai Henniges, Video Intelligence

contextual

Video is the holy grail of sight, sound, and motion; but what impact does ad format have on its ability to engage users? ExchangeWire speaks with Kai Henniges (pictured below), CEO and co-founder, Video Intelligence, who explains why video advertising must be in a contextual environment to create trust between users and publishers.

ExchangeWire: What is the importance of contextual video and creating the best video environment for the end user?

Kai Henniges: The digital media space needs to learn from past mistakes and focus on creating great experiences for users. As such, video should enhance the online experience, not detract from it. With that in mind, context is everything.

Users are online to answer a question or discover something. Video can be an important part of that mission by providing additional information, a new angle, or fresh visual insight. To do that, video must complement the text and image content around it; it must be ‘in context’.

By contrast, when video is out of context, it’s annoying, it turns readers off, and creates distrust between users and publishers.

With pre-roll on in-stream, you’re part of user expectation, you can navigate their ‘perceptual vigilance’ and become part of the story. We know from neuroscience studies that video that’s not relevant doesn’t even register. So VTRs, completion rates, and so on, matter less – we need to start thinking about what registers with users.

In research we’ve conducted at vi, we’ve seen both advertisers and publisher recall rates increase when contextually relevant video is placed on a page.

Out-stream video gets all the press – has in-stream video fallen out of favour with publishers and advertisers?

Out-stream isn’t a format, it’s a business model. It’s simply an ad exchange with a spin on it. There is no attempt to bring any benefit to the user; it’s the worst kind of advertising. With contextual video, yes, there’s an in-stream revenue opportunity in there, but essentially we’re delivering content.

Have brand safety challenges with players like YouTube damaged the potential value of in-stream?

The difference between trusted third-party video suppliers and YouTube is one of curation. The publisher trusts the video supplier to work only with quality providers. Furthermore, contextual matching means you’re only ever going to have video that’s in line with page content – as long as your content is safe, so is the video. That contextual element is something sites like YouTube and social lack. I think advertisers understand that differentiation, and treat each channel individually.

Conversely, how has social media consumption and the user demand for contextual videos changed advertiser demand for in-stream video formats?

In-stream is the gold standard for advertisers; they understand the benefit of their content appearing alongside video that users care about. So the demand will always be there. It’s the same reason there’s such a gravitation in ad tech towards CTV.

In fact, there are benefits to the online lean-in experience that are lost in lean-back experiences. Users are super engaged in their screens and, nowadays, expect video to be part of their media mix. Social platforms have doubled down on video; just look around you at mobile habits on the tube. Web publishers must keep up. Advertisers want more in-stream from publishers outside of the walled gardens.

How does publisher supply stack up against demand? Are you seeing different trends in different markets across Europe?

Kai Henniges, CEO & Co-Founder, Video Intelligence

We have very different conversations on each side of the Atlantic. European publishers ask us about our player, our content, and our contextual matching technology. They want to know that if they bring on board a new partner, it’s going to go down well with their readers.

In the U.S., the commercial conversation comes up much sooner. Whether that is a result of more direct business deals in the U.S., or of the fact that they’re under more commercial pressure, I don’t know.

We’re reaching a stage in the market where video is almost ubiquitous; most publishers have a video solution already. They’re now trying to optimise that video experience. They do this through quite lengthy test processing, comparing various video solutions on their own sets of KPIs.

Within the European market, we find the UK market is perhaps the most over-saturated. Our strongest markets are in Northern Europe, where user experience, functionality, and great content is paramount for publishers.

Has the GDPR changed the conversation around native advertising and contextual targeting?

Contextual advertising has been around as long as publications. It’s why a fashion brand would advertise in Vogue, a watch brand in Monocle, or a car brand in AutoTrader. That model continues to work, and we’re doing it online.

One of the natural results of GDPR is that people are looking for ways to reach audiences without having to deal in data. The days of rampant retargeting and addressable advertising were exciting, but ultimately upset users. In the end, the proven context model feels natural, and works the best.

The aesthetic aspects of native also ensure video matches its environment and proves a more seamless experience for the user. There’s no doubt that having a video player look and feel like it’s part of the site is beneficial. It simply makes your site concurrent with user expectations.

Are publishers looking at contextual video as a way of driving increased engagement?

It’s important to understand what a publisher’s goals are: some look for long engagement, others are driven by quantity of page views, others by returning visitors. Their goals will determine the page layout and how video fits within the design and the user journey. Video increases time on page, it ensures users stick around and, if the content is good, it also makes them return.

When we refer to video advertising, are we now generally shifting towards a mobile-first definition? Will the introduction of 5G push that even further?

Mobile is an interesting space, because it’s not as clear-cut as you might think. Yes, 60% of internet traffic is on mobile [depending on the research you use], but much of this is social, and gaming. If you look at video, most of it is live chat, and social stories. Without creating reams of stories on Snapchat and Instagram, publishers are missing out on the party.

An interesting case is news sites. They tend to have lower adoption for their apps, their traffic comes from referrals on social, search, or aggregators like Flipboard, Google News, and Pocket. So they need to invest in their mobile web experience.

The introduction of AMP Pages has done a lot to clean up the mobile browsing experience. Again, this was done with users in mind, that’s why it’s great. AMP now has great support for video players and video advertising. As such, publishers can really improve their mobile engagement rates.

The introduction of 5G is of course going to mean video and advertising is delivered more quickly and augmentation (AR, MR) will become commonplace. But the main impact will be on connected devices. How will video and connected devices work contextually? Ask me in five years, when you can Skype me on my fridge.

Video Intelligence

vi is a contextual video platform. We connect publishers, content providers and brands through video storytelling…