In July 2012, the IAB released the latest update to its VAST specification for the serving of video ads; VAST 3.0. Some of the new releases included upgraded functionality and improved reporting. It also included a standard for new ad formats: Skippable Linear Ads and Ad Pods. Georgia Underhill, European Operations Director for Videology, outlines the significance of these new ad formats and what the wider implications are for sequentially serving a sequence of pre roll ads.

Included within the recent release of the IAB’s VAST 3.0 standard is a seemingly minor spec on Ad Pods, or the ability to run more than one advertisement in a sequenced group.

The new functionality is meant to help make third-party adserving of multiple ads in sequence easy, but pods aren’t yet as standard in digital video as they are in traditional TV. The online video industry is still young and is working out how to make the best of what both television and the internet have to offer.

With this in mind, the mainstreaming of Ad Pods should prompt some discussion across the various players in the digital video ecosystem. I’d like to address a few of these key topics:

Getting inventory right

To date, the availability of premium online video inventory has been fairly limited, compared to the appetite for it. Multi-spot breaks could allow premium publishers to create more impressions without needing to increase the number of content streams played or viewers onsite. Unfortunately, they can also create clutter.

Publishers need to understand how many adverts their audience will tolerate. Viewers already see multiple ads in a single break on television and in some long-form content online, so we would expect them to be accepting of multiple ads in the right environment. Viewers about to watch (or in the middle of watching) highly desirable content are likely to be more tolerant than those browsing ‘snackable content’.

Advertisers also need to consider viewer reactions and responses. Will people tend to lose focus on the advertising messages if they are presented in multiples, therefore reducing the brand impact of each?

Ultimately, publishers will need to find the right balance between greater monetisation opportunities and the need to maintain an engaging viewer experience. Advertisers and agencies will need to work to understand how pods impact advertising effectiveness and therefore how to value ads played as part of a pod.

Pricing by creative length

Unlike TV, online video is regularly charged on a per-impression basis, regardless of specific creative length. If the TV pricing model migrates to video, this could also open up new monetisation opportunities for publishers and more pricing options for advertisers.

We already see that publishers here in the UK sometimes do charge more for a creative that is longer than 30 seconds. Publishers in some markets – France is an example – often charge different rates based on creative length with one price for creative that is less than 10 seconds, another for 10 to 20 seconds, etc.

This trend is likely to continue as advertising in pods grows in popularity. We’re likely to encounter a few different pricing models along this path, as the industry experiments and collectively works out what will become the new standard for online video.

First in break?

Years of research tells us much about consumers’ interaction with consecutive ads on TV and offers accepted guidelines on placement, effectiveness and creative execution around content and within a video ad break. But online video is a different medium to TV and it is unclear to what extent existing rules will apply.

We already see variation in performance based on some online metrics: For example, click-through rates tends to be much higher for pre-roll adverts than in mid-roll – once viewers start watching the content, they feel more committed and are less likely to click away. The same seems to hold true within a pod, with the advert in the first position having a click-through rate that can be 2-3 times higher than later positions.

Research and experience are the foundation of strong, data-driven advertising strategy, and new research will be needed to measure the brand impact of ad position. Advertisers, agencies and publishers need to understand the varying impact of as many parameters as possible – device, viewing history, time of day, timeliness, recent popularity and anything else that could predict viewer behaviour.

A more sophisticated market?

Greater flexibility and breadth of offerings will help publishers better monetise content and enable advertisers to plan more strategically, but with that flexibility comes complexity.

Multi-spot ad breaks will instantly place greater demands on technology to respond with multiple ads for one request. Ad-decisioning systems will have to factor in pod length, ad duration, and competitive separation in the milliseconds before the first ad is served. Getting it wrong and audiences will be alienated and advertisers will become wary.

Publishers need an adserver and a decision engine that’s ready to take advantage of this new opportunity. Both publishers and advertisers need technology that allows them to measure ad effectiveness as well as adapt to changes in pricing and delivery models.

Widespread adoption of multi-spot breaks within video offers a clear opportunity for both the demand and supply-side providers, and represents a natural, logical progression for the industry. Individual companies will need to develop their own strategies to maximise the benefits from this change. However, if we can make the most of it, then the shift of budgets to the online video market will only increase.