Industry Insights
The State of the Video Ad Technology Landscape with Ad3 Media

 ian-kane-ad3-media

Ian Kane
Chief Revenue Officer
Ad3

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For those of us unfamiliar with Ad3 Media, please tell us a little more about your company and offering. 

Ad3 provides publishers with video ad technology that yields a significantly higher amount of revenue from outstream video. Our technology is a full stack solution that includes a video player, video ad server, realtime analytics, and access to integrated demand partners. Publishers also use their existing video demand partners. Most important is Ad3’s patent pending auction process called CacheQ which generates video fill rates up to 400% per pageview.

Our team’s background is in the publishing space so we know the challenges with video first hand. We’re focused on two things – speed and revenue. Ad3 helps publishers extract as much ad revenue as possible while maintaining a quality user experience. 

 

What would you say are the biggest challenges the publishing industry faces today?

Declining on-page revenue. That’s where the rubber meets the road. Publishers need more revenue from their user base without sacrificing user experience with additional ad placements. Specifically with video – there are 3 problems:

  • Video ad technology is expensive and cost prohibitive. Companies charge publishers thousands of dollars a month in serving fees, licensing fees, and on-boarding fees.
  • Video ad networks sell publishers on high CPMs ($10), but only fill 20% of impressions. That’s a $2 CPM and no better than display ads.
  • Only a handful of companies actually have video campaigns. The rest are resellers. These resellers provide a VPAID tag, but when the publisher sends an impression the tag doesn’t show an advertiser. Instead the VPAID creative makes browser side calls to 10 other exchanges searching for a campaign. This process kills browser resources resulting in poor user experience. More importantly, it kills page revenue.

Publishers are trying the same tactics that worked for native or display ads. Repurposing old solutions to new problems is not the answer. Publishers who use Ad3 are able to generate higher RPMs from existing placements with improved page speed.

 

What are some up-and-coming video monetization formats that you think any serious publisher should take a look at, and why?

I’ll tell you what isn’t one – in banner video. In my opinion, IBV is a poor value for the advertiser and filled with nefarious groups because the arbitrage opportunity is significant. Publisher’s rarely benefit from a higher CPM with IBV and suffer because most display stacks run a waterfall or header bidding resulting in an overall loss of revenue.

Otherwise, the “pivot to video” is real. Every publisher will have their own comfort level with preroll, in content outstream, or floating outstream formats. In my opinion, outstream is a huge opportunity that any publisher can benefit from today. For mobile web or in-app, I think vertical video is also interesting when executed in a polite manner.

My recommendation regardless of format is to keep the video player at least 400 pixels in width. It’s a good practice and gives the advertiser peace of mind that it’s not repurposed banner inventory.

 

Ad3 offers an all-in-one video player, ad server, mediation layer, and real time analytics solution for publishers. Why do you think a holistic solution is a better option for publishers, rather than multiple point solutions?

Keep in mind Ad3 is a technology company and built an entirely new auction process not offered by anyone else. It is not a waterfall or header bidding – so existing solutions don’t support it. Earlier I mentioned 3 issues publishers face and CacheQ solves these problems. Repurposing existing technology was not an option as the 3 issues are a result of inefficiencies with existing tech.

Other than that – because it just works. The answer may be cliche, but the alternative is to license video player A, with ad server B, and analytics C – resulting in a Frankenstein ad stack.   When a publisher has a tech issue, they now have 3 different companies to deal with. Publishers already have enough ad partners to interface with on a daily basis. In this case, less is more. 

 

Getting adoption for using a video player by publishers is not an easy task; how do you plan on competing with frontrunners in the space like JW Player?

We don’t. I think JW has a good product that’s suited for publishers who are producing long or short form video content and are interested in gathering video data or recommending video content. Monetization is a feature set for their business and relies on partners like FreeWheel or DFP who run a waterfall.

Monetization (not content) is Ad3’s entire business with speed and revenue as our core focus. We offer a completely new solution so there is an education process. However, once publishers understand the value prop – adoption is a no-brainer.

We work directly with publishers, but can also supply our CacheQ technology to other companies who have unique offerings directly with publishers in a certain niche. Ad3 is passionate about improving the overall video experience and it’s not a zero sum game for us.

 

Do you think there will be a time in the future where a majority of publishers will incorporate video (outstream, sliders, in-banner) into their monetization strategy?

I’m biased, but absolutely. The majority are already testing. In my opinion, outstream will be the focus followed by preroll. Advertisers want video and publishers will create inventory to capture those high CPM ad dollars. The pivot to video is real, but publishers need to be smart about their strategy.

Columbia Journalism Review and AdAge each had great articles on this topic. The problem was publishers focused on creating video content in house for preroll dollars and reduced their editorial teams. Less editorial content resulted in lower overall pageviews. Publishers were left with generic video content which didn’t yield a greater net revenue to offset the pageview decrease.

This is why I think outstream video is the solution. CPM bids may be slightly lower compared to preroll, but CacheQ changes the equation by yielding such high fill rates. This means a higher amount of net revenue per unique pageview. Publishers can focus on producing high quality editorial content while taking home a bigger check each month.

 

You mentioned that your CacheQ auction tech delivers video fill rates up to 400%; could you go into greater detail into how you are able to drive this level of demand? 

CacheQ is truly next-generation technology. It’s a hybrid system of server-side request’s, low latency video player, and a proprietary auction mechanism. When the Ad3 video player loads on a publisher’s page it makes asynchronous requests to all demand partners. It retrieves all demand bids and prioritize them in a queue, with the highest CPM bid leading in the queue. All video advertisements are then played sequentially on the publishers page.

Example: A user is on the publisher’s page for 60 seconds and Ad3 has two CPM bids ($8 and $7) for campaigns at 0:30 seconds each. CacheQ will play the ads sequentially, resulting in a $15 RPM and 200% fill rate on that unique URL.

CacheQ has proven to be able to deliver up to 400% fill per user session while simultaneously improving the user experience with decreased page load times. The best part is that publishers are no longer incentivized to increase pageviews to generate revenue, but rather focus on creating quality content which keeps their users on the page longer

There is a great video on Ad3’s website about CacheQ which I encourage everyone to check out.

 

Currently your product supports video on desktop & mobile web. Do you have any plans to expand this to in-app video for iOS and Android — is there an opportunity there as well?

Yes, in-app is a natural evolution for Ad3, but we’re not focused on it now. We’re cautious not to spread ourselves to thin and the current opportunity on desktop and mobile web is significant. Once we have improved the overall experience for the greater web we will expand to improve other sectors. As I mentioned earlier, vertical video is really interesting and something we are actively exploring. Ad3’s plan for the future is ambitious and we’re just getting started.

 

How does monetization for video on mobile differ than that on desktop?   

The most obvious is that the screen is smaller so we need to be respectful as to how we use screen real estate. Floating outstream formats usually are not a good idea because they take up a higher percentage of screen space compared to desktop. Revenue is a focus for Ad3, but not at the cost of a poor user experience. The highest rill rate we have seen with CacheQ on mobile web is 150% compared to 400% on desktop.

Working with different platforms like iOS and Android have unique challenges we also had to address. For example, when a video plays on iOS the native iOS player launches. Ad3 has developed a solution around this so the native iOS player is not launched. This means Ad3 video player on mobile pages functions just like it would in a desktop environment.

 

Lastly, what are your thoughts on the future of monetization for the publishing industry?

It’s going to be a hybrid approach with video being the largest contributor to overall revenue. The only constant is change and smart publishers are testing new options all the time. In my opinion, publishers will realize that keeping their content and users on their own domain is a better strategy then producing content for various social platforms. Publishers get the pageviews, the audience data, and many other insights that each have revenue generating opportunities.

I’m bullish on the future of publishing and I think the publishers who work with Ad3 are some of the smartest!

 


 

Ad3 is an advertising technology company that provides publishers with a next-generation solution to maximize video ad revenue without sacrificing user experience.

Our patent pending CacheQ process has made Ad3 a leader in the video outstream market with fill rates up to 400% on desktop and 150% on mobile. Ad3 works with major DSPs, Trading Desks, Ad Networks, and SSPs to bring premium brand advertising to our publisher partners. In addition to built-in demand, Ad3 provides a proprietary video player, video ad server, mediation layer, and realtime analytics (updated in milliseconds).

Use our demand partners or bring your own! Bottom line, Ad3’s CacheQ methodology will increase the overall dollar per page view for quality publishers with almost 0 impact on page load.

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