AppNexus's outstream video has been launched for buyers and is four weeks into closed testing for publishers. Eric Hoffert (pictured below), SVP of video technology, AppNexus, speaks to ExchangeWire about the open exchange approach for outstream, viewability and engagement rates – and to whom outstream video is aimed.

ExchangeWire: Is it too early to ask about results and reactions to the AppNexus outstream video exchange?

Eric Hoffert: In the brief period of time since AppNexus launched its outstream video marketplace, we’re seeing positive results, both quantitative and qualitative. From a metric perspective, the average CPM for the outstream video marketplace is above USD$10 (£7); which exceeds the average of our video platform, as a whole.

With respect to publisher feedback, a premium news publisher is using AppNexus for outstream integrated with our video ad serving and has been pleased to see an average CPM of USD$15 (£10.55). Another client in the food & beverage vertical is starting to scale outstream, and run managed campaign and open exchange VPAID demand across 25 different domains. And a popular consumer internet site network, with more than 100 million unique monthly visitors, is pleased with initial results, and sent this feedback: “Amazing job! Amazing progress! We are grateful.” They also complimented the native video user experience and its seamless integration while maintaining site KPIs. We’re excited by our clients’ enthusiasm, especially at this early stage before general availability.

In addition to new outstream inventory directly onboarded from publishers, we are seeing good adoption of Teads as a leading supplier of premium outstream inventory in our programmatic open exchange marketplace, achieving strong CPMs and competitive completion rates.

How do outstream video ads differ from other video ads?

Outstream video is the opportunity for publishers of all kinds to monetise their inventory with video ads. Unlike instream video, outstream ads play outside of video content, often between paragraphs of text. So, publishers don’t need to have video content of their own to leverage outstream video advertising.

Is outstream video native?

Yes, outstream is also referred to as native video, as well as in-read, in-feed, or in-text. Think of it as a way for independent publishers to bring the in-feed video ad format of Facebook, or inline autoplay experience with Twitter First View, to their own sites.

Why does outstream video guarantee high viewability and engagement rates?

More than ever, buyers want to reach engaged audiences across all major screens, and to mirror the way they now consume their media. Video presents a huge opportunity for marketers and advertisers to target their audiences, build brand awareness, and persuade their customers with compelling and viewable content.

Outstream is particularly appealing to buyers with viewability campaign goals; because outstream video players only open when the player is in-view. They also typically run with audio off by default, in contrast to in-banner video, which often runs with audio on. Outstream video can also be implemented in such a way so as to reduce video latency, an area that we believe is critical to user experience and engagement.

At the launch, AppNexus emphasised the open exchange approach for outstream is better than the walled gardens created by YouTube or Facebook. Can you explain?

Walled gardens like Google and Facebook offer access to only one kind of video inventory – the inventory they want you to buy – and tend not to budge when it comes to open market pricing or freedom of choice. Walled gardens can also be a technologically 'closed' system. On a closed video buying platform, buyers and sellers are not allowed to play by any rules other than those the interface already stipulates, which can limit creativity.

Since AppNexus’ founding more than eight years ago, the focus has always been on open platforms, freedom of choice, and aligning with our customers’ interests. We believe buyers should have as much flexibility, transparency, and control as possible in choosing the right video inventory for their campaigns; and sellers should monetise on their own terms. A great example of this flexibility is the AppNexus Programmable Bidder, which allows marketers to develop customised approaches to buying inventory.

We think that open video marketplaces are better: They have more participants, more price competition, more liquidity, and more opportunities to find inventory that meets campaign needs. The fact that AppNexus is providing access to both instream and outstream inventory, in one open market, is another example of our open approach.

Given that open exchanges tend to have higher risk of invalid traffic, how does AppNexus’s crusade against invalid traffic translate into the outstream video exchange? Are there third-party verification capabilities?

Through a combination of data science automation and manual efforts, AppNexus enforces strict Inventory Quality standards to make the ecosystem better for consumers, advertisers, and publishers alike.

For video specifically, we have undertaken extensive efforts to ensure high-quality inventory, such as removing content farms masquerading as legitimate video sites, and shutting off resold inventory from networks that are not working directly with publishers. Going forward, we will continue to refine our inventory quality techniques in order to ensure proper declaration of video inventory, and maintain a safe and vibrant video marketplace.

At whom is outstream video primarily aimed?

The majority of publishers are using text only. We see a large market opportunity for video advertising here, one that could be larger than the instream market.

Would it be potential overkill for publishers of owned video content?

We believe there are untapped opportunities for video publishers and the OTT space. For example, broadcasters can use outstream on text-only pages of their owned and operated sites to drive traffic to their broadcast video sites. The same methodology could be used to promote broadcast TV or film properties on third-party text-based sites to drive users back to broadcast TV and film sites. We don't see these formats competing; we see the combination of instream and outstream expanding and accelerating the video marketplace.