Online video grabbing larger share of brand budgets: AOL study

The company's State of the Video Industry report found that three quarters of all buyers and sellers currently involved with video advertising increased their video budget in 2015. Channels seeing less spending include in particular television, but also search and display.

However, for the majority of buyers, the cut to television budgets is less than 10 percent. Only one in seven said they’d cut more than 15 percent of their TV budget to fund digital video.

Alex Khan, managing director of AOL Asia, told Campaign Asia-Pacific that the most surprising discovery from the study for him was the way video is being measured.

The clickthrough rate (CTR) remains one of the most popular measures, despite what the industry, particularly the supply side, has been saying for a while: that other metrics, such as completion rates, audience reach and brand lift post-campaign should be looked at instead. 

“I think measuring clickthrough rates is a legacy finding relating to display and not specific to video,” he said. “This a metric that I hope we move forward on."

The report highlights two significant trends for the region. First, the preponderance of over-the-top video (OTT) and connected TV as an advertising medium. It accounts for 25 percent of the advertising budget of those surveyed, compared to just 16 percent in the US and only 5 percent in Australia.

Southeast Asia is also experiencing a rapid increase in the use of mobile video. In 2015, most publishers said their video sales had increased, with over a quarter saying sales were up by more than 25 percent.

The medium faces some challenges however, with buyers indicating demographic targeting, cross-device campaigns, and attribution were issues facing mobile advertising.

Khan said that there are moves being made by major industry players to address these issues, for example using anonymised data in terms of unique user IDs and that will flow into various products already in market.

As an example, he pointed out that AOL’s ONE, the programmatic platform the company launched in Asia last year, enables optimisation against campaign goals across all screens, formats and inventory types.

“In terms of cross-device campaigns, we are working with our colleagues at Verizon to leverage unique anonymised IDs and then with demographic targeting we work with companies like Nielsen and ComScore in order to provide demographic verification,” Khan added.

However in parallel to solving these challenges for marketers, he added, there is a need to understand the current challenges, which include safely and quality concerns around inventory.

“This is being addressed by publishers selling premium inventory to manage their yield and of course the move to trade in private marketplaces, and the fact that 76 percent of buyers are looking to trade in private marketplaces in 2016,” said Khan.

He added that the company is also looking at new and upgraded technologies that integrate with legacy systems within agencies, which is an ongoing challenge.

“Also, there is a lack of experienced talent on both the supply and buy side in order to drive programmatic forward,” he added. “These are key issues the industry has a whole needs to address.”

The report also highlighted the increasing adoption of programmatic technology. More than 50 percent of publishers surveyed said they were using programmatic to sell their premium video inventory.

Khan said that respondents in Southeast Asia recognise that programmatic is capable of more than just being a platform for real-time bidding, with a large proportion saying its key capability is for data-led audience buying and selling.

“It demonstrates the understanding this region has of the opportunity programmatic provides,” he added. “That should make the next few years very positive for publishers with video inventory.”

The research study was conducted in partnership with Hall & Partners, with fieldwork and data collection from Southeast Asian brands, agencies and publishers across Singapore, Hong Kong, Thailand, Indonesia and Malaysia.

The interviews were conducted online in Q4 2015 and represent responses from industry stakeholders who are involved in the buying and selling of digital video advertising (mobile, desktop or OTT/Connected TV).