Ed Haslam is Senior Vice President, Marketing, at YuMe, one of the world’s largest video ad networks. At CES, YuME announced their partnership with Samsung on their connected TV inventory, which follows previous deals with LG and Roku. In the second part of a two-part interview, Ed talks about the challenges ahead for the industry, the advantages offered by connected TV and video advertising, and what YuMe are doing with mobile video.
What are the advantages of using connected TV and video advertising compared with traditional broadcast TV advertising?
On connected TV, the main advantage is the combination of the measurability of digital and the lean-back context of TV. With a 50 or 60-inch screen running potentially very interesting and very interactive ad units that are measurable in terms of whether they actually watched the ad, whether they clicked on it or engaged with it. This is something they could never do with TV.
The advantage connected TV has over traditional online and mobile is that the consumer is sitting on a couch, leaning back and the screen in front of them is so large so the brand message really resonates. I think the most interesting trend that is going to be happening more than ever this year is the second screen opportunity.
There is still legitimate questioning about how often will consumers really interact with an ad unit on a TV screen. We’ve all heard the stories of our children going up to the TV and seeing an interface that looks like an iPhone or iPad interface, and running their hand across our nice TV screen trying to make it move.
While I don’t think anything like that will happen soon, if you were to synchronise an ad experience with an iPad in their lap, and there’s a call to action in their lap based on what they’re seeing on a screen, I think we’ll see some really interesting second screen advertising technologies emerge in 2012. It’s still experimental but it presents very exciting opportunities for brands to engage with consumers in new and unique ways.
What’s YuMe doing in mobile video?
We entered the mobile market both in Europe through the acquisition of Appealing Media and in the US we took a different approach to the other players such as Millennial and Admob. We came at it from a brand and video perspective first.
TV brand advertisers have great video assets. Those video assets can be repurposed appropriately for the right screen, not just a non-interactive pre-roll, but an interactive pre-roll that takes into account the capabilities and geometry of the mobile phone, and acts as an extension of an existing campaign. Historically, in mobile, ECPM rates have been really variable because it’s hard for them to fill their inventory.
There really is a ton of mobile inventory available and with the high CPM rates they’re asking for it’s hard to get scale. Experimental campaigns might pay $30 or $40 CPM, but for someone who’s trying to run national brand campaigns, their CPM rates are typically in the tens of dollars or even less.
I think the challenge and the opportunity is for mobile publishers to realise that they can get a much higher ECPM by being part of a larger campaign that will fill all of their inventory. And then the brands need to trust that the audience is on apps is very similar to the audience who watch the TV shows and are on the online properties that they trust.
Is YuMe working with traditional mainstream broadcasters?
We certainly try. They have their own direct sales forces and almost all of them are able to sell all of their inventory themselves. So they don’t really work with ad networks or need ad networks, although we might work on some of their secondary products, for example we work with MSNBC on ad serving and fill some of their inventory.
We segment the market into three segments – head, torso and long tail. Think of it as the world of cable TV today. You have two or three premium channels that you watch regularly; they have very large audiences with a small amount of highly viewed content. Then there’s a torso or mid-tail of content, which is, to use a cable metaphor, the next ten or fifteen channels you watch, the food networks, comedy central etc. Those sorts of analogies are arising online right now.
There’s a lot of great premium short-term video content out there and that’s where we tend to focus our efforts – for example, we work with Funny or Die and at one point we worked with Machinima. Then there’s the long tail and nothing epitomises the long tail more than YouTube, which is very small micro-audiences gathered around what can be questionable advertising content.
What’s the main challenge for the video industry?
I think it’s measurability. In the end, what large-scale brand advertisers care about is how video compares to their TV campaign, or how is this complementing their TV campaign? And right now, we’re in the early days of people like Nielsen and Comscore are trying to show non-duplicated audience reach, both reach and effective reach metrics, that are apples to apples.
That’s really early stages but what’s holding back the market is that the guy who controls that larger TV brand spend isn’t able to say in a predictable way, ‘If I move 20% of that spend over, I’m going to see better reach, better brand metrics and ultimately better sales’. So we need to prove that out this year.
Nielsen has a great product called Fusion that helps on the planning side. We use that with a lot of our customers. They have also just brought a new product out of beta called OCR, which stands for Online Campaign Ratings, which is the holy grail if you will, as it’s an online GRP as it’s apples to apples with to a TV GRP.