Verizon has seemed somewhat desperate to appear relevant in the world of media as of late, so perhaps it is hoping that a new set of trainers will keep the naysayers, including Faultline, at bay. The telco has countered a concerning set of Q1 results with a trio of upgrades to its ad platform, content control and live broadcasting offerings.
The headline feature is Smart Prebid, a server-side ad integration that optimizes the order of bidding in publishers’ favor, as well as 4K HDR broadcasts and the promise of sub-second latency in live streaming.
While advertisers will likely appreciate the operational efficiency of some of the upgrades, namely Smart Prebid, these offerings do not distract from the feeling that the worst of the pandemic is yet to come. Ad revenues were down 10% in March and the company’s executives are predicting a 20% to 30% slump in digital media revenue in the coming months due to the pandemic.
It seems the subsidiary is trying to mitigate expected losses with new shiny performance tools. On the earnings call, Hans Vestberg, Verizon’s CEO, commended the Media subsidiary for “extremely innovative new products and new ways of delivering services the last couple of weeks.”
The first of the new features is Smart Prebid, a server-side ad integration that exposes inventory. Smart Prebid attempts to bypass the generally accepted order of operations in filling ad supply, which Verizon argues can often inadvertently undervalue publishing inventory.
“Prebid addresses that by calling out to demand partners in an open and transparent fashion, maximizing value, and providing transparency in the bidding process”, said Ariff Sidi, GM at Verizon Media Platform.
The hope is that Prebid will speed up the auction process as more demand partners adopt the Prebid open-source framework. Verizon say the integration is low-risk and allows for fair market competition.
Verizon Media has also upgraded the analytical tools available for both advertisers and publishers. Ad Data enhances the buyer experience of receiving performance data. Technical teams are better able to highlight any errors, timeouts and tracking issues.
Meanwhile, Ad Analytics serves publishers, allowing them to identify and respond to trends in ad performance and segment data. Trends may be defined by areas such as environment, device, and demand partner.
Other new features center around Content Control and Syndication. Channel Scheduling aims to eliminate the need for broadcast playout technologies by allowing content owners to create “virtual live linear experiences” with assets from their own VoD library, a live feed or a live event.
Output Syndication streamlines the process of publishing content to multiple social media platforms. There are also plans to allow for additional personalization beyond ads, publishing directly to OTT platforms and digital multi-channel video programming distributors (dMVPD) from a single user interface.
Verizon Media has also upgraded its live event streaming capabilities. The platform’s ingest, encoding and CDN capabilities have all been enhanced to deliver live content in 4K HDR and broadcasts can now reach over 10 million devices, according to a recent test.
The dashboard for live event operators has also been updated with Live Event Markers. This enables operators to tag moments of interest throughout a live event, such as a goal being scored or a break in play. This metadata is then published alongside the video streams, allowing content owners to design new features for on screen overlays and interactivity.
Verizon Media is also working towards sub-second latency in live event streaming. The Real-time Streaming feature is currently in beta mode.
Verizon Media’s total operating revenue for the first 3 months of this year was $1.7 billion, down 4% – or $70 million – year on year. The earnings statement goes on to explain that this dip was the primary cause of declining revenues in Verizon’s Corporate and Other segment in Q1. This was down 2.7% – $63 million – year on year.
CFO Mike Ellis explained on the earnings call that Verizon Media Group advertising revenues fell 10% in March, “almost entirely” due to the pandemic. He went on to predict that Verizon Media would likely see the 20% to 30% slump digital media revenue in Q2 in tandem with the wider industry.
On the damage to Verizon Media’s ad revenue, the operator’s CEO, Hans Vestberg, tried to put a positive spin on the pandemic. “We’re encouraged about the increased activity and the growth of engagement because that’s ultimately going to pay off later on,” Vestberg said.
Judging from a Variety-hosted webinar that Faultline attended a few weeks ago, it seems Verizon is putting on a brave face wherever possible. Chief Business Officer, Ivan Markman, cited the emergence of more buying options as a savior from the ad-pocalypse, citing that nearly 60% of connected TV ads will be sold programmatically by 2021.
On the webinar, Markman said that Verizon was very keen to “connect content with commerce – helping content distributors to diversify revenue streams.” These updates see Verizon trying to make good on that promise.
However, on the earnings call, Vestberg commended the company’s ability to cut costs in testing scenarios, suggesting there is more of that to come. Considering the layoffs we saw at Oath just over a year ago, we would not be surprised if the more redundant limbs of Verizon Media get the chop.
Verizon’s overall net income for the first quarter of the year was $4.3 billion, down 6% – $873 million – year on year. Corporate and Other makes up just 7.2% of Verizon’s revenue, but it seems the rest of the company is not doing too well either.
Verizon has not had an easy ride for its various media-centric incarnations. Verizon Media was formed out of the implosion of Oath in late 2018, which was seeing its share of digital ad revenues shrink year-by-year in the US. The creation of Verizon Media marked part of a wider effort to create a three-pronged Verizon – focusing on Consumer, Business and Media – as well as significant job losses – 10% of Oath’s workforce.
Harboring the internet ghosts of Yahoo and AOL, the company has often appeared desperate to stay relevant in the media landscape. At least these upgrades show it is sprucing itself up in the right areas.