Czech market's response to walled-garden approaches for programmatic video
In the summer of 2015, Google announced it would pull its YouTube inventory from AdX, essentially turning YouTube into a walled garden. As a result, third parties, including DSPs, faced a sudden dearth of video inventory. To compensate for the shortage, many DSPs sought alternative sources from SSPs that specialized in video inventory, while others opted to integrate with local publishers that offer quality video inventory at scale.
The latter option proved successful for the Czech market, thanks to the leadership of R2B2, a local yield management and technology company. R2B2 leveraged its technical acumen to build integrations between top video publishers and the Adform SSP. As a result, advertisers can now buy in-stream video (pre-roll, mid-roll and post-roll) on popular Czech websites, including iDnes, Playtvák, Prima PLAY, Expres or You.bo. With 70 million bid requests per month, supply easily meets market demand and provides a great alternative (or supplemental) to YouTube inventory purchased directly via Google.
Brands are already seeing success. For instance, Metaxa, a spirits brand, and ČSOB, a Czech and Slovak banking institution, were the first advertisers to take advantage of this new opportunity. Both companies launched campaigns executed by Red Media, a local performance oriented media agency. Red Media’s Performance Advertising Director, Jan Běhounek was impressed with the reach, performance and efficiency of the R2B2/Adform solution, noting: “For Metaxa Party House, we wanted to target young people who have an interest in lifestyle and parties. We succeeded in reaching 77% of that community, and achieved a higher click-through rate (CTR) compared to direct buys. More than that, better frequency control allowed us to reduce YouTube overlap by 18%, which delivered higher media efficiency. We achieved similar results for a Cool Karta campaign for CSOB. In that instance, we used customer data to target parents. The combination of data and optimized frequency capping helped us to achieve a 20% lift in CTR.”
Pricing for New Inventory Solutions on Par with YouTube Inventory
Red Media was interested to know if the cost of inventory purchased via the Adform SSP was on par with the cost of YouTube inventory. This insight would be important for making recommendations to clients in the future.
There are differences between the inventory sources. The first concerns skippable ads, meaning consumers have the option to skip an ad after some period of time. Most video units available from local publishers support the skip feature, but there are a few exceptions. This contrasts with YouTube TrueView, which always allows users to skip the ad. Some advertisers feel that although YouTube costs are often higher, the completed views are more qualified, and worth the premium.
Another difference is that YouTube inventory is purchased based on a cost per view (CPV). With this pricing model, advertisers pay only if the consumers who are targeted for the campaign watch the entire video ad, or some increment of it, or take a specific action (TrueView In-stream). This differs from the CPM model found in open RTB markets, which requires advertisers to pay for all impressions in which an ad is served, regardless of user behavior. At first blush, the CPV model seems like the better option, but digging deeper, Red Media discovered that both models deliver equal results.
Here’s why: Most publishers support VAST 2.0 standard for video ad delivery, which enables advertisers to track and report individual events, such as video play time, pauses, sound off/on, clicks, video completion, etc. Moreover, VAST 2.0 also allows advertisers to set a skip (a feature that may or may not be supported by the publisher’s video player). All of these tracking options combine to provide advertisers with multiple ways to gain insights into campaign performance based on user behavior, which they can then use to calculate the cost per view, analogously to YouTube.
In fact, this is an exercise Red Media performs regularly, and the company has found that the CPV earned on inventory purchased via the CPM model is often the same, or even lower in favor of the non-YouTube inventory. “We’ve compared the average CPV we reached on YouTube inventory across all of our campaigns, and we’ve consistently found that the average CPV we see on R2B2 video inventory was on a par, if not almost identical to YouTube,” said Mr. Běhounek.
Given Red Media’s ability to compare RTB CPMs to YouTube CPV, advertisers are now free to determine how much of a premium they should place in YouTube’s TrueView (i.e. skippable) video inventory.
“We look forward to more integrations with publishers so that advertisers can purchase their video inventory in the RTB markets, and benefit from the efficiencies of programmatic. For that to happen, publishers will need to ensure their video players support VAST 2.0,” said Martin Čelikovský, CEO of R2B2. “In the future, we will upgrade to VAST 3.0 which provides for additional functionality. For example, it allows advertisers to choose the length of time a user must spend watching a skippable linear ad before skipping it. That’s a subtle, yet important step – an ad’s effectiveness will increase with length only to a limited extent, and programmatic advertising allows optimization by tweaking the skip time. Unlike YouTube, our Czech inventory allows adjustments for the local market.”
So while Google may have walled off its YouTube garden, an alternative has emerged that enables marketers to execute, optimize and track video ad campaigns. That alternative scenario merges strong video inventory, various local providers offering data for targeting granular user segments, smooth in-stream video workflows within Adform DSP, and automatic video file conversion for effortless ad creation.