The role of ad networks in the broadband video advertising universe can’t be overstated. They’re the place to go to buy advertising on the majority of sites. Jason Glickman, CEO of Tremor Media, one of the largest ad networks that specializes in video advertising, explains how advertisers can benefit from a network buy, how Tremor supports a variety of new ad formats and how it is working to standardize video advertising so it can be bought easily across the Internet.
iSPOT: There are three main options for buying video advertising: directly from portals or specialized video sites, from syndicators like Brightcove or ad networks like Tremor. What’s the benefit of buying from an ad network?
Glickman: Right now the ad network world is pretty big. In the standard image space, companies like Ad.com, Valueclick and Tribal Fusion are all well known. Only a handful of folks are doing it for video and obviously Tremor is one of them. The real difference between standard and video networks is the major technical hurdles you face to get started. When you place an ad tag for standard images you give a publisher a tag and they place it for 728 or 300 x 250, the size on the page where it appears. It’s a completely different set of technologies and abilities when you try to place a video ad inside a video player. You’re talking about inserting a video ad into a Flash player or Windows Media or QuickTime or Real and the capability to do the things advertisers and publishers are used to don’t exist. The ability to do easy frequency caps and dynamic insertion of ads takes special technology.
In the past, what you would see is the same ad over and over again and the reason for that was people were hard coding a video with an ad and they were married together, there was no dynamic insertion of an ad based on real time. Now we look at a request from a publisher and based on the data we can determine if the user has seen an ad before, we can do geotargeting and day parting and behavioral targeting and choose from our list of advertisers the right one to serve at that moment.
The value of a network for video is pretty great and pretty needed in the world now because if you look at some of the top go-to destinations where companies want to place ads, portals like Yahoo and MSN or the large content publishers like Dow Jones or ESPN, they have a severe shortage of video inventory. There’s a ton of demand because advertisers are putting video online at a rapid pace and looking to spend significant budgets, but there aren’t a lot of impressions to go around. Where a network comes into play is we bring a significant amount of volume that trumps any individual portal’s and we can bring it because we’re aggregating several hundred publishers into one buy so we can give an advertiser a significant volume buy.
iSPOT: But they’re not buying the big sites?
Glickman: That’s the key for us. Our value isn’t representing big sites because they have their own sales forces, so they don’t need a network. Our publishers are tier two, they’re good quality publishers, not the video blogs or smaller publishers. They have good content but they’re not the largest sites. We bring large volume to advertisers.
The second reason why a network is valuable is because of the targeting. We can aggregate publishers together and chop them into different categories like entertainment or finance and also layer in targeting by frequency capping, geotargeting and day parting. We can also lay across demographic targeting with ComScore data to determine the best place for males or females or different age groups. We’re doing that in a very detailed way to make large buys possible. The problem with targeting is you can go too targeted and not have enough volume. You chop it up so much there’s not enough inventory supporting a decent buy. But because we have targeting and volume we can deliver large campaigns for advertisers.
And price is number three. When you buy a campaign from a large publisher, their CPMs are sky high because the inventory is low. We have better relations with publishers and more inventory so we’re able to charge good rates and bring it as a value to advertisers. Rates, targeting and volume are three reasons for using a network, which applies to non-video networks but even more to video networks because of the supply/demand issue.
iSPOT: Advertisers don’t buy individual sites through a network?
Glickman: They buy by channel. We have an open site list which you need for video because it’s a branding play. We pitch by channel, which creates the value of the network. If an advertiser wanted to pick specifically one site, they’re better off going directly to the site.
iSPOT: How many different channels do you have?
Glickman: We have 13 main channels and we break them up into subchannels. So let’s say the entertainment channel has music, movies, TV and general entertainment. Health is broken into prescription drugs, female health, men’s health and other subchannels.
iSPOT: Pre-roll has been the most popular ad format, but recently new formats are being developed like the YouTube overlay. Do you offer them all?
Glickman: We are format agnostic, we accept all major formats. The most popular are pre-roll and in-banner and we have the capability to run the new overlay formats. We’re not pushing one format; we let advertisers choose based on the target of their campaign.
iSPOT: Once an advertiser selects a format, what’s your role in getting the ads to play?
Glickman: All formats run equally well across our entire network. For us to roll out a new ad format it has to be able to run across our entire network. Our network is 92 million users strong, we reach 51 percent of the Internet. All these new formats are great, but if they can’t run in volume, they’re not worth it. Advertisers want to spend significant volume, not a small test because that’s all that can support it. We standardized the formats, it’s pre-done. We work with publishers to make sure they can accept the formats and they use our technology, which gives us control. We can update it so they can accept the new formats automatically.
iSPOT: Last week we interviewed Ben Weinberger, the CEO of Digitalsmiths, which offers a contextual video advertising product that is being used by ad networks. Do you think it will be successful?
Glickman: It will eventually become a part of ad conversation, but in order for it to become real there has to be a critical mass of volume. To contextualize content in a meaningful way for advertisers you need to have significant volume to support it, so if you are contextualizing every time there’s a basketball game being played and that’s where you want to serve Nike ads, you have to make sure there’s a significant amount of basketball content and not just 18 clips. That’s when it will become more real and powerful in the next year or two.
iSPOT: How would you make it available to advertisers?
Glickman: It will be built into our current set, an extra level of targeting. We’d offer contextual advertising as an added layer.
iSPOT: How do you think the use of video advertising is growing and how do you as an ad network help it grow?
Glickman: A big part is there’s a lot of budget looking to move online but there is an inventory crunch at tier one sites. If there’s $100 million to be spent but only inventory among tier ones to spend $25 million, there still is that demand to push it online. We act as a placement option to spend larger budgets. We give advertisers the ability to spend significant dollars online in smart ways.
We also work with the IAB to set standards for the industry. We’re looking to make the ability to place campaigns easy and also the same among publishers and networks so advertisers don’t have to do things 25 different ways for 25 different players to launch a campaign. The industry as a whole is creating the standards so advertisers can release budgets and there’s no logistical reason holding it back.
iSPOT: Are budgets really growing for video advertising and what percent of budgets goes to video?
Glickman: I don’t know the actual percentage of overall budgets but I can see the size of budgets is growing and the number of advertisers now using video is growing significantly. We’re seeing budgets marked for TV moving online and we’re seeing some significant buy sizes.
