Week in Review: YouTube Still Not Profitable, TV Direct Sales Grow at Expense of Exchanges, Amazon Winning in Germany


This week, we learned that even one billion viewers doesn’t necessarily lead to profit, that TV viewing is becoming screen agnostic and that Doubleclick is bigger than the stock market. Welcome to VAN’s Week in Review. For a weekly summary of industry news and other VAN interviews and videos, sign up to the Weekly Video Round-Up.

One Billion Viewers but YouTube Struggles to Break Even

YouTube’s bottom line is ‘roughly break-even’ and in didn’t contribute to Google’s bottom line in spite of the fact that it accounted for about six percent of Google’s sales last year. The Wall Street Journal reports that the online-video unit posted revenue of about $4 billion in 2014, up from $3 billion a year earlier.

The Wall Street Journal’s sources said that YouTube’s inability to expand its core audience beyond teens and tweens, combined with low levels of daily engagement on its channels, are both contributing to the video giant’s disappointing profit margins.

Elsewhere, new challengers are upping the pressure. Facebook and Twitter, which routinely send traffic to YouTube, are building out their own video offerings. Facebook, and startups such as Vessel, are trying to poach YouTube stars. Meanwhile, Amazon.com Inc. and Netflix Inc. are changing the image of ‘online video’ by licensing Hollywood-produced content and creating original programming.

FreeWheel Video Monetisation Report: Good News for Broadcasters, Bad News for Exchanges

Research from FreeWheel this week provided insight for the sector, including revelations that TV viewing is becoming screen agnostic. Highlights included good news for US broadcasters whose ‘Fall TV’ shows saw a 67 percent growth in video ad views compared with last year. OTT streaming devices also passed out tablet devices when it came to generating revenue, accounting for 8 percent of content monetisation.

Q4 marked the first quarter in which over half of long-form and live monetisation came via authenticated viewing (where users log in to a given service), up from 13 percent last year. This is a particularly important trend as it will enhance the TV industry’s ability to target users with first party data.

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Elsewhere, the share of broadcaster video ad views moving through ad networks and exchanges continued to decline, dropping this quarter to 3.3 percent from 4.6 percent last quarter, and from 5 percent last year. FreeWheel expects that networks and exchanges will continue to play a role in the digital video ecosystem, but that Publishers will continue to favour direct sales channels, preferring the control, premium value and visibility. Meanwhile, marketers are increasingly cautious due to fears around quality of inventory, which include content quality, viewability, traffic fraud, and brand safety on long-tail sites.

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Germany’s SevenOne Media and Nugg.ad Introduce Group-Specific HbbTV Targeting

ProSiebenSat.1 publisher and SevenOneMedia and targeting specialist nugg.ad will be able to apply predictive behavioural targeting on video advertising campaigns delivered via HbbTV.

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Video on Demand in Demand in Germany

Gold Media reports that VOD services have been growing rapidly in Germany. In September 2014, just 20 percent of their German internet users used VOD, compared to 35 percent now. Amazon Prime Instant Video has made significant inroads into the German market and is used by one in three consumers of VOD.

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Dailymotion Teams up With TubeMogul on Video Advertising  

TubeMogul, a video buying platform, and video sharing site Dailymotion entered into a strategic partnership this week. Advertisers can now purchase Dailymotion’s in-stream inventory and leverage the platform’s proprietary first-party audience segments through TubeMogul’s software. TubeMogul now has access to Dailymotion’s extensive socio-demographic, behavioral and interest-based audience segments created in partnership with Krux.

Facebook Unveils First TV Ads

Facebook launched its first ever UK TV ads this week, forming part of a wider advertising campaign that includes billboards and a takeover of Oxford Street station, to demonstrate how the service helps build friendships. The three TV ads were created in house by ‘The Factory’ and are brand focused.

AmEx Don’t Agree With Viewability Standards

Rachel Herskovitz, global media manager at American Express, suggested the brand have a ‘zero tolerance policy’ around non-viewable inventory and tore into MRC standards this week. Herskovitz was speaking on a panel during ‘Inside The Mind Of The Advertiser,’ hosted by analytics provider Integral Ad Science on Tuesday.

Viacom Launches MTV Branded Music & Video Streaming Apps

Global media company Viacom is adapting to changing consumer viewing habits with the launch of two new music and video streaming apps. MTV Play is a VOD service featuring many of MTV’s most popular shows, whilst MTV Trax is a music streaming app designed for casual music consumers put off by expensive ‘all you can eat’ bundles.

ProSiebenSat.1 Produces Internet-Only Series 

German commercial TV group ProSiebenSat.1 has started production of a series to be shown exclusively on its video-on-demand portal MyVideo. From mid-April 2015, Der Lack ist ab (translated: The glamour is gone) will be offered free-of-charge by MyVideo.

MAGNA Global Expands Consortium Mix 

According to AdExchanger, IPG Mediabrands’ media investment arm, MAGNA Global, has added 15 long-tail and premium TV networks to its consortium mix in order to reach small and niche audiences. The long-term goal is to automate more than 50% of client buys. The company’s move parallels TV audience activation platform Simulmedia’s work to segment niche cable network audiences, many of which fly under network buyers’ radars.

Videology Appoints Robin Kingerlee as EMEA Media Director

Video advertising platform, Videology, today announced the expansion of its European leadership team with the appointment of Robin Kingerlee as EMEA Media Director. He joins Videology after eight years with Microsoft Advertising.

AudienceXpress Pair Up with Rentrak 

Programmatic TV buying platform AudienceXpress and TV researcher Rentrak paired up to strengthen marketers’ TV targeting. Rentrak’s set-top and shopping data will couple with AudienceXpress’ ad serving tech for local and national cable networks.

Rubicon Project Grows Fast, but PubMatic Grows Faster

The Rubicon Project has posted record 2014 results with Q4 representing a year-on-year increase of 49%. However, competitor PubMatic has revealed GAAP net revenue grew 90% from 2013 to 2014, surprising some in the industry.

Integral Ad Science Accredited by Media Rating Council

Integral Ad Science, global valuation platform, has received accreditation from the Media Rating Council (MRC) for its Video Ad Viewable impression measurement and related video ad viewability metrics.

Tremor Video Says Programmatic Now 14% of its Revenue and Growing

Tremor Video, a video marketplace, has revealed programmatic accounted for 14% of Q4 revenue (total of $41.9 million, a 15% year on year increase), and it expects more positive growth in 2015. On the buy side, Tremor scaled up its demand-side platform (DSP), VideoHub, revealing a preferred partner deal with agency trading desk Varick Media Management.

Ad of the Week: Honda, ‘Keep Up’, Wieden+Kennedy London

Honda teaches you to speed read in a series of ads which challenge the competitive to keep accelerating to keep up.


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