TrueView – big opportunity?
TrueView is YouTube’s online video ad format which is based on an interactive model. The service allows the viewer to skip the advertisement or select to watch an ad from a choice of different ads. The company is only charged if the viewer watches the video ad.
The TrueView ad format offers three main types of ad placements:
TrueView In-Stream gives viewers the option to skip the ad after 5 seconds.
TrueView In-Display ads appear as a thumbnail and text on YouTube watch pages in the right-hand pane of suggested and recommended videos.
TrueView In-Search ads appear in a special promoted section of the video search results pages on YouTube and in Google Video search results.
Tech analyst and partner at Kleiner Perkins Caufield Byers (KPCB), Mary Meeker called the service a “game-changer” in her annual trends report released in May this year. She argues that skippable ads will actually accelerate the monetisation of video. “Skip option keeps users happy, encourages marketers to make their ads entertaining, and lets advertisers only pay when their ad is actually watched,” she says.
YouTube owner Google maintains that because viewers can skip or select the ads they want to watch, the advertiser saves money and reaches a more targeted audience. According to Google 15%-45% of YouTube viewers let the ads play.
Why is it important?
Online video advertising has been earmarked for big growth as OTT video content is increasingly driving network traffic.
According to Media Research Group (MRG), video on demand subscription will grow to more than 120 million subscribers by 2017. As the popularity of online video content increases, marketing companies are turning their attention to online video ad opportunities. “The popularity of digital video viewing is helping to drive the expansion of the online video ad market,” market research company eMarketer wrote in a report.
The Global Entertainment & Media Outlook 2014-2018 report also predicts that online video will be the fastest growing of all forms of advertising.
What does this mean for operators?
Online video consumes massive amounts of bandwidth, requiring telecoms operators to invest in network upgrades in an effort to keep up with the additional traffic.
However, operators often miss out on revenues created by OTT online video content and are looking to create new business models which will allow them to generate revenue from content providers.
As online video advertising grows it is critical that operators should leverage their assets and capabilities and collaborate with OTTs to capitalise on the trend, according to a report by consulting firm Booz and Company released in November last year.
Some operators are beginning to generate revenue streams from online video ads by creating new services such as data analytics, which they can sell to businesses on a wholesale basis.
What opportunities are there for operators?
Big Data is central to making online video advertising successful, says Video-Nuze, an online publication for the online/mobile video industries.
Operators have a strong retail network, with the ability to reach millions of subscribers, according to Booz and Company’s report “Enabling the OTT Revolution: How Telecom Operators Can Stake Their Claim”. In addition they have the ability to collect location, behavioural, and usage information about their customers.
The consultancy expects there to be an increase in interest among marketers for Big Data. Data provided by operators will allow companies to better understand customers and improve marketing efforts through location-based video ads and personalised campaigns.
In early June this year, AT&T announced plans to launch a new service which allows businesses to access the operator’s network data to confirm a customer’s location. The location information services capability is designed to notify businesses when participating customers travel internationally.
Initially designed to improve security for credit card companies, such a service is also very useful for marketing, and could be used by companies for more targeted online video advertising.
The new service is enabled through an application program interface (API) and is part of AT&T’s Mobile Identity API Toolkit, which launched in December 2013.
“Companies want to get ahead of customer expectations, offer new ways to solve challenges and differentiate from their competitors,” said Laura Merling, VP of business digital experience at AT&T.
Verizon Wireless too offers a service to marketing companies that provides real-time location of specific audiences, including where the users are and what they do, online and of?ine.
The number of operators looking to collaborate with OTT’s to provide service offerings which bolster profits for both companies is increasing and the growing online video advertising market provides many opportunities for operators.