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April 04 2016

The Rise of Out-Stream Video Formats

Why should you read this article?

Because you should understand why out-stream is outperforming its predecessors.
Romain Job

What’s In-Stream?

In-stream video advertisements run before, during or after a video. In industry lingo, that’s “pre-roll”, “mid-roll” or “post-roll”. The ads are served in the same player as the video being viewed and are comparable to the commercial breaks viewers are used to seeing on TV. They usually play for 15 – 30 seconds.

The main problem with the monetization of in-stream ads is that many publishers just don’t have enough inventory to sell.

What’s Out-Stream?

In-banner video

In-banner video advertising is a form of out-stream that has been around for quite a few years. In-banner ads are hard to ignore, especially when they’re interactive. But they’re not a favorite among viewers; unwanted sound and images can be intrusive and disrupt the user experience. Moreover, these ads are traditionally placed at the bottom of a page and may never even seen by the user.

In-feed out-stream formats

The limits of in-stream and in-banner video has contributed to the rise of in-feed out-stream — the latest format to hit the market. These video advertisements play outside of video content and can be served between paragraphs of content or in a mobile stream. They’re often simply referred to as “out-stream video”.

smart video read

Smart Video Read (in-app)

 

Out-stream video is particularly appealing to publishers because it can run on text-heavy pages. The ads play automatically once a certain percentage of the player is visible to the user, which means users can scroll away from the ad to pause it. If they choose to watch it, the advertisement automatically disappears once it’s finished playing. The template analyzes the publisher’s content and automatically identifies the best position to display an ad. It also features customizable options, so advertisers decide if the video will play on auto mute or with the sound.

The format gives the user more control over when and how the advertisement is viewed. In other words, their engagement, or lack thereof, regulates the player.

Out-stream functions on desktop, on mobile web and in apps. It hit it big with retail, technology and Consumer Packaged Goods advertisers; those categories made up 19%, 18% and 16.5% of out-stream mobile video ads in Q4 of 2015.

What’s the Big Deal With Out-Stream?

The user is king, so publishers and advertisers have been leaning towards less intrusive ad formats to improve content experience. The burning question has been, how do we captivate viewers and keep engagement high while making the experience a positive one for users?

At first glance, out-stream may not seem like the way to go. It can certainly be considered an intrusive ad format in certain cases: it appears in between content and can break reader flow, the user needs to scroll to see the ad, but it is capable of appearing without notice or warning, and with the volume on blast, at that! It’s clear that out-stream has its faults, but with the right tools and options provided by a tech solution that provides highly customizable templates, publishers can serve users an acceptable advertising experience.

The format has caught on quickly on both the buy-side and the sell-side, with two-thirds of publishers and six in 10 advertisers believing it makes for a better user experience. Advertisers are also content with the format because, unlike with in-stream, they can buy programmatically on premium sites without being concerned about the quality of the ad placement. The payment method, cost-per-completed-view (CPCV), is also a plus for them. Publishers are only compensated if a certain percentage of the video is seen.

The format is a clear benefit to the sell-side as well: since the videos are served in between text, the sell-space, unlike banner and in-stream inventory, is practically limitless. And out-stream can be sold for a pretty penny and is priced at four times the amount of traditional formats in mobile. This statistic is especially key when considering the lower number of ad opportunities per page for mobile publishers. Moreover, publishers don’t have to worry about creating their own (expensive) video content to monetize through in-stream; they can save time, money and headache of dealing with video production by selling out-stream placements.

Forrester has found publishers are officially warming up to the idea of out-stream — 69% believe the format will be more or much more important to their clients’ advertising portfolio in the future. Perhaps most importantly, close to 60% of have seen better ROI compared with other formats. The buy-side is in agreement — the same study found that 77% of agencies agree with the publishers’ assessment regarding the importance of out-stream.

out-stream in-stream banner video

The end result — the rise of out-stream — is a simple case of supply and demand. Publishers want more to sell, and advertisers want more ways to get after premium content, especially through programmatic.

The format is also a strong response to the walled gardens that certain ad tech giants have built around in-stream video. Google’s decision to discontinue the sale of YouTube inventory on AdX, its open exchange, has forced advertisers to buy via DoubleClick Bid Manager (DBM) and AdWords. Similarly, Facebook’s LiveRail is no longer supporting third party video ad serving. Out-stream, however, can be a way for publishers to monetize with the help of independent supply-side focused players dedicated to helping them track viewability, campaign exposure and fraud.

Fair enough, but is there a way for publishers to keep the lion’s share of money that comes from big branding campaigns? Yes, that’s possible, too!

The VAST standard (which has been widely adopted), is helping to make high CPM video units easily tradebale through RTB. So, with the right technology partner, out-stream is a way for publishers not only to leverage existing inventory, but also reach high CPM demand at scale through programmatic sales.

 

Sources

http://www.emarketer.com/Article/What-Perks-of-Out-Stream-Video-Ads/1012645

http://blogs.wsj.com/cmo/2015/08/31/can-out-stream-video-ads-help-save-mobile-advertising/

http://www.definitions-marketing.com/definition/out-stream-video/

http://smallbusiness.chron.com/instream-advertising-36316.html

http://adexchanger.com/tv-and-video/has-out-stream-video-come-of-age/

http://adexchanger.com/digital-tv/news-corp-puts-unruly-to-use-and-diversifies-video-inventory/

http://www.adotas.com/2016/02/leading-outstream-mobile-video-ad-categories/

http://uk.businessinsider.com/appnexus-launches-outstream-video-open-marketplace-2016-2?r=US&IR=T

http://digiday.com/sponsored/appnexusbcs-005-843-walled-gardens-falling-inventory-video-will-change-2016/

Photo by Seth Doyle

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