Happy Friday 01.02.2019

Congratulations you made it through dry January!

Happy Friday!

This week the pace of news has been less frenetic, that said still lots going on; Firstly we look at Google who are moving in on what was once the domain of AWS: the AdTech Cloud. Next we look at Hulu who next month are launching two new products; ads which display when a user pauses their content & attribution.

From Hulu to traditional broadcasters who are laying the foundations for what will be a huge market: programmatic TV, the news this week is Comcast owned FreeWheel are bringing their digital ad-server to sister company NBC Universal’s linear offering. Finally from future gazing we take a trip into the weeds; we turn our attention from video to display and look at the latest viewability stats from Google’s state of ad viewability report.


Is Google’s Cloud The New AWS?

A wise person once said “In a gold rush, sell shovels” during the AdTech boom of the past decade Amazon did exactly that, with AWS becoming the shovels that were sold to AdTech start ups looking to find programmatic gold. As we all know Amazon’s DSP is increasingly competing with Google’s DV360 & interestingly Google is moving in on what was once AWS’ space:

OpenX & Teads are using Google’s products in different ways, Teads are using BigQuery to analyse 90 billion daily events from their ad auctions, & OpenX to run the auctions themselves. OpenX’s deal runs for 5 year & is said to be worth $110m. The swap to running their auctions on Google’s cloud will take 6 months & will be completed by the end of H1 2019.

Cloud is typically more expensive than on-premise servers, especially when operating at scale, so how this move plays out with falling take rates remains to be seen, but it’s worth noting cloud has a number of advantages; it’s elastic so can scale up when demand requires & it doesn’t require significant engineering resource to manage, given that OpenX recently reduced its headcount by 25% this might be of benefit. Beyond this cloud scales well internationally, something that’s harder to do if you own your own metal & in December OpenX said this is something they are keen to do in 2019 so the move makes sense from that perspective too.

Many have questioned if it’s smart for Teads & OpenX to use a competitors products to run a business, but a) I’m sure the lawyers have that angle covered & b) arguably Google is no more a competitor than Amazon in this space; lets not forget the Seattle giant’s is not just growing its DSP business, it’s also ramping up its server side header bidding product (TAM) that competes with both Teads & OpenX for ad dollars. Additionally DV360 is the biggest player in the market & co-locating in the cloud could allow OpenX to run auctions faster, boosting auction participation rates in latency constrained environments like mobile as well, so this could be a smart move.

Hulu Launches Pause Ads & New Attribution Tools

Twenty five million people use Hulu each month, the majority of them the ad funded product, Beginning in Q2 Hulu will test new kinds of commercials that surface whenever a viewer decides to hit pause. Coca-Cola & P&G’s Charmin are first to test the format, which you can check out here:

The “Pause Ad” is a translucent banner that appears on the right side of the screen & it’s said to be less invasive than a video overlay as viewers can still see their TV show underneath. This is a cool idea & Hulu say initial consumer feedback has been positive, but some buyers may be concerned how much attention the format will garner given it won’t appear until several seconds after the viewer pauses their show.

Keen to prove the value of their offering in general, Hulu also recently announced an attribution product that is in beta currently & will be fully rolled out in H2 2019. For more detail on the new ads & their approach to attribution this video shot at CES is worth a look:

The new attribution product will allow advertisers to match their customer data with Hulu’s subscriber data, there’s so much innovation happening in TV at the moment, speaking of which lets look how some of the bigger players are preparing for what will be a huge market...

FreeWheel & NBC Universal - The Future Is Automated

Programmatic TV is one of the most interesting areas of AdTech currently, there are 3 key players currently: SpotX (owned by RTL), FreeWheel (owned by Comcast) & Xandr (owned by AT&T). They all want the same thing: to help advertisers deliver personalization at scale.

2019 is the year that the key players in the OTT lay the foundations for what (as I said above) will be a huge market. Certainly YTD the pace of innovation has been intense; Xandr was making big waves at the start of the year with news that it was bringing AT&T data to Turner & only a fortnight ago RTL announced their acquisition of Yospace. Not to be outdone FreeWheel & their sister company NBC Universal have been outlining their vision for the future:

Short term the plan is to use FreeWheel’s ad-server to schedule ads running across NBC’s linear offering, a first step towards a longer term goal where ad-server consolidation creates a single pool of digital, VOD & linear advertising opportunities where discreet audiences can be targeted in a connected way.

This is what Google who recently won Disney’s business from FreeWheel plan to offer advertisers long term, but a key difference here is the offering is set to be video only currently whereas Google (& indeed Xandr) are looking to offer consolidation across screens and formats, which coupled with their DSPs looks like a strong offering. Competition in this space is set to be intense & this will drive further innovation, so 2019 & beyond is set to be as interesting as 2010-2016 was for programmatic display.

Google’s The state Of Ad Viewability

Future gazing is fun but it’s sometimes good to look at where the industry is now. Here Google put lots of good research online, their latest opus outlines the State Of Viewability provides an overview of display, video & of course YouTube viewability.

They have arguably access to more data than anyone on this subject & indeed they analyzed data across their platforms using Active View to come to the results below. Their findings for display showed mobile devices, significantly outperforming desktop:

Pretty woeful scores across the board though & perhaps unsurprisingly it also showed vertical formats performing poorly in general. Beyond this the study offered fairly conclusive proof that the saying of “gold below the fold” was factually inaccurate:

The study found the Netherlands leads the way for display viewability in Europe with a 51% average, followed by the UK at 50% with the US hitting 49% on average. Obviously what really counts is not the hard % but the vCPM, the measurement of how much it costs a buyer to put 1000 viewed ads in front of an audience.

My key take out here that in order to get away from hard percentages, AdTech vendors need to take a leaf out of Amazon’s book and incorporate MRC viewability into their attribution models. I’m sure It’ll happen soon.

Okay that’s the newsletter done for another week & thank you for making it this far!

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Thanks & have a lovely weekend