Your browser is not supported. Please update it.

9 December 2021

Ad tech big boys thrown under bus by VideoByte’s video-first approach

‘Less is more’ is rarely a wise mantra in ad tech. Webinars, panels, and interviews that Faultline has attended in recent years have all suggested that a broad-church advertising platform is the best way to stay on top of diversifying media consumption. But a call this week with ad serving platform VideoByte made us reconsider.

Founded three years ago, VideoByte is a SaaS vendor focusing on video-first ad serving. Speaking to the company’s CRO, Nick Frazee, he claims that within the small pond of ad serving vendors, there are few that are truly optimized to deliver video.

This poses an interesting thought. Often it is the rule of thumb in ad tech that greater cross-platform presence across all technologies will create a more streamlined ad tech offering; one that is less plagued by an industry-wide lack of standardization. However, according to Frazee, any ad serving those touches of display and mobile is not best optimized to serve video, even if they say otherwise.

“Most ad servers that are broad stink at CTV, especially Google,” he told us, explaining that the technical needs of serving video ads are niche. CTV ads are especially truncated, with no cookies or universal identifier. Frazee is certain that any vendor claiming to serve multiple formats has CTV making up a tiny fraction of overall activity.

Google is not alone in falling short in video, according to Frazee, who argues that SpringServe has lost its non-biased reputation since being acquired by SpotX and then subsequently Magnite.

Echoing what many ad tech vendors have only told Faultline behind closed doors, Frazee argued that SpringServe’s reputation as the “Switzerland of ad serving” has been compromised, as the vendor must prioritize serving Magnite’s best interests over those of its clients. Perhaps a tad awkward, as four of VideoByte’s employees came from SpringServe.

So, with a finely-honed, video-first approach, what is VideoByte bringing to the table that others are not? Frazee’s answer drew upon three terms that seem to largely mean the same thing – transparency, auction control and compliance. The first two are self-explanatory, but compliance is a new one for us.

In VideoByte’s world, compliance refers to buy-side visibility. This essentially offers a guarantee against fraud for those on the demand side by promising transparent reporting on ad performance – essentially, standard transparency protocol but with a demand-side flavor. Frazee emphasized this focus on buyers, arguing that VideoByte promises demand path optimization (DPO), alongside the more traditionally offered supply path optimization (SPO).

Throughout our discussion, Frazee kept emphasizing that VideoByte’s revenue-first model set it apart, although it took us a while to cut through the PR smog and dissect the buzzwords. Essentially, this means providing tools that allow CTV publishers to increase revenue without a demand bias.

Brimming with confidence, Frazee noted that most CTV-savvy ad servers have been acquired by players that may corrupt their integrity, the acquisitions of Publica and SpringServe being prime examples. He therefore concludes that VideoByte is the top US-based ad server for CTV.

Frazee argued that the hardest aspect of serving video ads is data management, as vendors are faced with the struggle of defining an end user in ever-shifting data ecosystems. With changing national regulations as well as data compliance specs from the International Advertising Bureau (IAB), VideoByte is constantly assessing how it defines its bid stream and caches bids.

It is therefore fitting that VideoByte has recently integrated with contextual data distributor Iris.TV, which Frazee says is unique in being the first native integration of the technology into a third-party platform. Every other integration with Iris.TV has required a two-step process on the user-side to access the technology, whereas VideoByte’s users are automatically given contextual data.

There is another new partnership afoot, with Frazee revealing to Faultline that European media agency Media16 has chosen VideoByte as its exclusive ad serving partner. Media16 will be using a white-label instance of the company’s VBX ad server.

At present, VideoByte’s revenue is split 50-50 between online video and CTV, but Frazee is adamant that this will soon swing in favor of CTV, promising that 90% of VideoByte’s product, leadership, sales, and innovation focus is on the format.

Frazee is feeling positive about the future for VideoByte, arguing that CTV will be the biggest recipient of the shift to streaming that is underway in the media landscape. The company is predicting 200% growth next year, fueled by buyers wanting more personalized ad tech that is curated to their needs. This could lead to some media companies taking ad-serving completely in-house at some point down the line, with Frazee arguing that there are already “at least 20” that would benefit from doing so.

He feels that TV OEMs are increasingly encroaching on CTV advertising by incorporating flagship AVoD platforms within UIs – something which is apparently emblematic of the bright future ahead. “It proves there is tremendous value in ad technology,” he told us, while also eyeing up potential clients for the white label version of VBX.