Are online advertisements winning or losing? Are advancements in targeted and personalized advertising experiences giving the ad industry a well-needed lift or will viewers be forever averse to the interruption, even when viewing a totally free streaming service? While these aren’t inherently new questions, we are growing tired of contradictive headlines from rival ends of the video industry.
So, when a statement arrives in our inbox claiming up to 47% of streaming ads are failing, rather than highlighting how more than half of streaming ads are succeeding, we must tread carefully.
The findings can be found in the Q1 State of the Streaming TV Industry report from Conviva. As a video QoE measurement vendor doing its business firmly in the OTT video camp, the company naturally has vested interests as with any vendor report, yet we feel Conviva has a track record of delivering fairly well-balanced insights.
With regard to the alarmingly high ad failure rate, Conviva says it pinpointed 11 ad failure points across the ad delivery chain, highlighting up to 12% empty ad responses, up to 8% failure from incorrect ad media rendition, up to 7% VPAID (video player ad-serving interface definition) errors, and up to 6 second delays caused by wrapper ads. Ultimately, these factors contributed to Conviva’s conclusion that up to 47% of ad attempts, across ad requests, decisioning and selection, ad creative delivery, and creative playback, may not make it to the viewers’ screens as intended.
But these figures are frankly useless without something to compare them to. Unfortunately, Conviva has never measured ad failure rates in the past, which could in itself be testament to the rise of online video advertising. At any rate Conviva has quietly started measuring mitigating factors now. Or perhaps it has always measured ad failure points but simply never reported the results in its quarterly streaming reports. Either way, we see this as progress.
The point Conviva is trying to hit home, however, is the importance of delivering online ads at broadcast-level quality as viewers expect, which remains a huge challenge despite developments in addressable advertising – whereby different viewers are delivered different ads while viewing the same content. Clearly, having a success rate of just 53% is unacceptable.
“As advertisers begin to dig into what defines quality of ads, there are granular, time-based quality measurement metrics unique to streaming ads necessary to capture the extent of start failures and delays, buffering, and playback errors. While there is significant potential in streaming TV for personalization with addressable ads, the fundamentals have frequently been ignored,” states the report.
By fundamentals, it means the basics of QoE linked to buffering and delays. As buffering continues to improve, with a 34% reduction year on year as of Q1 2019, this will only serve to enhance the successful delivery of ads. Conviva claims a delay of just five seconds in ad playback will trigger 13.6% of the audience to abandon viewing entirely. “In addition to streaming TV providers and advertisers missing out on exposure of that ad when the viewer abandons, the effect is amplified across subsequent ad breaks which the viewer will never see,” it warns.
Big change is coming though, as Conviva projects a substantial shift of advertisers to online services, with the vendor seeing an exponential increase in streaming content consumption on ad-supported services. As a result of TV service providers embracing hybrid models encompassing tiered pricing structures, otherwise known as the freemium model, subscription-only offerings are apparently less abundant today than in the past few years. “With ad-supported content used as a funnel to lead customer acquisition, this entry point becomes crucial,” notes the report.
The bar chart below shows the positive correlation between lower rebuffering ratio and higher engagement. The only anomaly is a miniscule drop in engagement from a rebuffering ratio of 2-3% to 1-2%.
On a more positive note, online video viewership has rocketed 72% in a year, with the report revealing that vMVPDs like DirecTV Now and Hulu saw viewership surge 108% year on year. Another key finding, from the analysis of one trillion daily transactions on 3 billion streaming apps across 180 countries, shows that Amazon Fire TV captured an 18.6% share of connected TV device viewing, up significantly from an 11.4% share in Q1 2018, while Roku maintained its long-standing lead of a 42.4% share.