New IAB Ad Specs Bode Well For Monetization of OTT TV

Zvika Netter, co-founder & CEO, Innovid

Zvika Netter, co-founder & CEO, Innovid

By Fred Dawson
April 8, 2013 – The emergence of a consensus-driven interactive video advertising framework suited to monetizing high-value TV-quality entertainment in the OTT domain seems much closer at hand than it was just a few months ago.
Working through the auspices of the Interactive Advertising Bureau, major players in online advertising have embraced the new Video Suite of in-stream video standards released by IAB a year ago while working together to forge a newly released set of concepts that go deeper into the details of how ads are formatted and presented. There’s still a long way to go, but at least now there’s some uniformity to how use of interactive technology in the IP domain can be exploited to build new revenue streams, both for programming originating live over the Web and for time-shifted TV programs where new ads can be dropped into pre-set ad slots rather than leaving original ads in place.

“The dynamic fusion of sight, sound and motion plus interactivity offers marketers an unbeatable package,” says Peter Minnium, head of brand initiatives, IAB. “To date, too little of digital video advertising has included an interactive component, owing to a lack of standards.

A year ago IAB took a major step toward overcoming this deficiency with the release of the IAB Video Suite, which allows ad servers to use a single ad response format across multiple compliant publishers/video players. It also enables rich ad experiences and detailed event reporting back to advertisers and provides content owners a common means of describing where ad breaks should be placed in their content when they do not control the video player or the content distribution outlet.

Now, after a “Rising Stars” contest designed to identify new concepts for standardization, IAB is working on specifications for five new “ad units” that will help define what advertisings are buying when they purchase in-stream video ads. “These innovative digital video ad units will propel the sector’s growth,” says David Doty, executive vice president and CMO for IAB. “In addition, the widespread deployment of the IAB Video Suite will surely help pave the way for the rapid adoption of these formats.”

Indeed, says Zvika Netter, co-founder and CEO of Innovid, a leading innovator in the online video advertising space, the likelihood that standardization would drive much greater participation in this type of advertising motivated Innovid to provide what turned out to be some of the key technology underpinnings to the latest portfolio of emerging standards. “We’re quite confident by virtue of our investment in technology and services that we’ll continue to lead in this space,” Netter says. “The IAB initiative helps us to convey that what we’re doing is the real deal and that this is where everything is going.”

Specifically, Innovid’s ideas are contributing to development of specifications in two of the five concept categories chosen by IAB. Moreover, Netter notes, the fact that all five are mirrored in various aspects of the vendor’s iRoll interactive video advertising platform reinforces customers’ confidence that they can push ahead with these solutions knowing they’re in sync with the industry’s agenda.

The two ad units Innovid is directly contributing to are known as “Extender,” which provides viewers the opportunity to more deeply engage in an ad by choosing to extend its length in real time, and “Full Screen,” which offers an interactive prompt with an ad and then fills the software player with a full range of interactive possibilities, including more video, social connectivity, catalog options, etc. Innovid’s brand names for these categories are iRoll Extender and iRoll Expand, respectively.

“The idea is to have a format that conveys a common way to let users understand what they can do so that every publisher doesn’t have a different execution,” Netter says. “The first step was to agree on the concept and what needs to be standardized, and then it’s up to the working committees to say here’s what the icon looks like and here’s how to phrase the call to action.”

The other IAB-designated ad units moving to standardization were described as follows:

  • Filmstrip – Scrollable, multi-panel horizontal unit delivered in page with users fully in control;
  • Ad Control Bar – Sitting above the player controls, this interface allows viewers to engage in multiple ways without affecting the video ad content;
  • TimeSync – Rich ad content overlaid on video, changing in sync with the video ad content.

In addition to Innovid andYahoo!, contributors to the five ad unit concepts chosen by IAB included CBS Interactive, Celtra, DG MediaMind, DoubleClick, Jivox, Microsoft Advertising, Mixpo, Spongecell, Tremor Video and YuMe. These winning companies will collaborate with IAB, the Agency Working Group and digital video ad operations experts over the next few months to create detailed specifications for the units to run across screens and players.

In the case of the Extender category, the Innovid contribution was co-submitted with Yahoo!, which will join with Innovid in a working group tasked with finalizing development of the format. “We believe the iRoll Extender is a great solution for clients with long-form spots, such as movie studios,” says Deborah Lammon, vice president and digital media director at Universal McCann. “The Extender will allow users to opt in to watch a 90- or 120-second theatrical trailer within a traditional 30-second pre-roll placement. Presenting viewers with an option to keep watching content will enable us to find new media opportunities and engage moviegoers with the full power of movie trailers.”

Innovid and Sony Pictures Television’s multi-platform entertainment network Crackle have collaborated on a version of the iRoll Extender dubbed “cRoll,” which is now being used in a campaign promoting Disney’s feature film “Oz The Great and Powerful.” When viewers respond to the call to action appearing in the video pre-roll ad for the film, a slate takes over the screen providing additional information about the movie, including an image gallery carousel with character bios.

The ad unit, to be employed in feature films, TV shows and original content channels on Crackle, provides a consistent experience across all screens and delivers measurable engagement metrics to advertisers, says Eric Berger, executive vice president for digital networks and general manager of Crackle. “We were really invested in creating a solution that would allow advertisers to take advantage of everything Crackle has to offer,” Berger says.

Innovid’s commitment from its foundation in 2007 to developing technology exclusively for in-stream video advertising online has paid off, drawing a total of $27.6 million in venture funding, including a new Series C funding round totaling $11 million. The company says its iRoll product portfolio, now integrated with many top premium video publishers and all the major ad networks in the U.S., enables 77 percent of the U.S. video inventory.

“Our business is pretty widespread at this point,” Netter says. “We supported about 2,000 interactive video campaigns in 2012, which represented 450 percent growth over 2011.”

Getting to this level of engagement wasn’t easy, given the hassles agencies faced with so many different publisher and device formats and procedures to deal with, he notes. In order to convince the publishers and ad networks to integrate with Innovid the firm had to demonstrate there was money in it for them, but to get the agencies to participate required that Innovid could get their interactive video ads into content wherever it appeared.

“It was an insanely difficult chicken-and-egg challenge,” Netter says. “Early on we got a leading publisher to participate and were able to get started offering our services to their clients. Other publishers’ clients saw this and helped us bring their publishers into the ecosystem, and it grew from there. Now the biggest advantage we have over potential competition is we’re able to do something at scale that no one else can do in the U.S., and now we’re doing it globally.”

The interactivity capabilities are tied to an initial level of personalization that allows ad decisions on the publisher side to be made in real time based on geographic location, program context and time of day. “In the case of the Disney ad, the publisher knows by the zip code that the movie will start showing in x number of days,” Netter explains. “So, using our ad server, they can start running the campaign and then change the messaging as they go along to where once it launches they can say, it’s showing at such-and-such a theater at 9:30, purchase your ticket now.”

Getting to deeper levels of personalization is a goal that will take a while to reach, he adds. “At this stage we’re not going down to the personal levels of gender, income or things like that. Personalization is extremely important in the TV world, but it’s going to take two to three years to get to that level of granularity. But, from a content perspective, you know which content is running and what the relevant ad might be. That information is available to the publishers.”

Innovid is pursuing a direct CPM payment model versus charging licensing or set-up fees. Charges range from 30-35 cents per 1,000 impressions for a basic pre-roll utilizing the Innovid Ad Server to as much as $2.00 per 1,000 for the most advanced ads applying the iRoll functionalities.