The video advertising industry has a supply problem. While video publishers are enjoying soaring CPMs, the shortage of premium inventory is limiting growth and prevents advertisers from being achieving scale comparable to TV. The problem is compounded by the fact that the move to video can still be daunting for web publishers, many of whom are still clinging to a model based around text, images and display advertising. VAN spoke with Chris Johnston, Brightcove‘s Director of Technology Partnerships, about how their newly launched Content Exchange – and syndication in general – can help increase the pool of premium inventory available for advertisers.
For those who aren’t already aware, what exactly does Brightcove do?
In short, Brightcove is a provider of cloud content services that enable organizations to publish and distribute professional digital media. Brightcove Video Cloud, our market-leading online video platform, is used by more than 3,800 organizations in more than 50 countries around the world to build and operate digital media experiences across PCs, smartphones, tablets and connected TVs.
From an advertising standpoint, Video Cloud makes it easy for organizations to monetize their video content with pre-built integrations with third party ad networks and servers. We support advertising from a technical standpoint, but we do not participate in the economics. We have a sophisticated ad policy engine that allows publishers to make ad requests to their ad server and/or ad network of choice. But the revenue they earn from those ads belongs 100% to them.
You recently launched your Content Exchange. What is it, how does it work and who are you currently working with?
The Brightcove Content Exchange is a new initiative to bring together a select group of Brightcove partners with large libraries of high quality online video and to make their content easily accessible to media publishers using Video Cloud. Publishers can also execute advertising strategies around this licensed content. As a result, publishers can quickly and easily augment the amount of video they have available to publish, thereby increasing their ad inventory and the value of their ad inventory. Current Content Exchange partners include AOL Video, Diagonal View, Internet Video Archive, NewsLook, ScreenPlay, and Touchstorm.
As background, the importance and value of increasing the size of your video content library is easy to overlook. Video ads pay more than text or display ads. Video is engaging. It draws people in, keeps them engaged with your site and brand longer, and turns passers-by into a loyal audience. And advertisers want those people and are willing to pay more for them.
Brightcove works with content providers who have uploaded massive amounts of video in to Video Cloud. Those content partners can then “push” videos in to the Video Cloud accounts of other customers who want it. Once they have access to the video, a publisher can program it just as if it were their own, including it in multiple players and playlists, accessing it via the APIs, and perhaps more importantly, running advertising against it. Publishers do not pay to access the Content Exchange. Most content is paid for after it has been used via multi-party ad revenue sharing relationships. So it’s an easy and inexpensive way to increase your content library and earn more money.
The lack of supply is a common complaint from advertisers and agencies on the buy side. Are we seeing a boom in content production to meet the demand, and if not, why not?
The cost of content production has definitely dropped over the past decade, predominantly due to the increasing availability of low-cost equipment (think: camcorders, desktop editing software, etc.). However, not everyone is cut out to be a professional content producer. And even those that are may find it difficult, time-consuming, and/or too expensive to create as much content as they want. So syndicating in 3rd party content can be helpful.
The other side of this coin is that publishers don’t always realize that they’re lacking in supply. Often they think that they need to reach more people with the content they have by getting out to a wider audience on other sites. That’s a fine strategy, and we encourage publishers to do exactly that. However, what is somewhat counter-intuitive, is that they can also increase value of their own property by using 3rd party content. Having more content will attract more visitors via search, keep them on your property longer, and keep them coming back more frequently.
What type of content is most in demand and are there any areas in particular suffering from a lack of supply?
Content needs vary greatly across categories, sites, audiences, etc. In a broad sense you can think about it in terms of topical content (current events and news) vs. evergreen content. And within each of those there are many categories. On the topical side, we obviously see huge demand for celebrity-oriented news, but there’s lots of consumption of “real” news as well. Evergreen content consumption runs the gamut from “how to” type videos to scripted entertainment. One thing we’ve learned is that publishers are finding more value in have many pieces of shorter content vs. one, long, beautifully produced piece.
I recently learned about a large magazine publisher who had been creating long (~30 minute), beautifully produced documentaries. They discovered that they could moderately decrease the production quality and produce more pieces that were shorter in length (say six 5-minute clips) and the aggregate value increased. The total upfront production expense went down, but people consumed more of the content (and therefore more of the advertising).
We often hear the phrase “content is king” used to explain how having great content gives you a competitive advantage. Yet the reality is that syndicated content tends to deliver more revenue for content owners. Do publishers risk losing competitive advantage by sharing their content with other publishers, or is it simply a question of choosing your partners wisely?
Businesses certainly need to evaluate their content partners carefully. It’s unlikely that a large national news provider for example would want to run video that is watermarked with their biggest competitor’s logo. But for publishers, there is an ample supply of complementary content, often from content syndicators who don’t directly compete, that won’t dilute their brand.
For example, imagine I run a “do it yourself” site that has tons of articles and information for people about how to fix things around the home. I have articles written by me and my staff of handy-people about how to do anything from building a deck to changing the oil in my car. Most articles have pictures, and some even have some videos. But I want to get a video for every article, and ideally I’d like to have several videos for each article. There’s no way I could create all that content myself, but I could easily source it through the Content Exchange.
My advertisers – lumber yards and hardware stores and repair services – can now reach my audience of eager homeowners in display ads and video ads. And my article about changing oil just went from generating a combined $10 CPM on the three banners on the page, to north of $20 or $30 because people watched the three example videos that showed them how to do it. And I didn’t have to do any extra work, or pay anything more for the opportunity.