Happy (Black) Friday!!!
This week there’s lots of ground to cover we look at; Trade Desk CEO Jeff Green talking about the future of OTT & why Netflix will introduce ads. Next we look at why YouTube are introducing ad pods that mean users will see back to back TrueView ads. We then turn our attention to whether a business that had implemented the IAB Europe’s consent framework was GDPR compliant or not & finally we turn our attention to a super interesting study of 5,000 marketers by Xaxis that found (amongst other things) that the No.1 outcome we buy in the UK is still CTR.
If there’s more typos in this email than is normal, I apologize… As I write this I’ve just got back from a fantastic ExchangeWire awards evening. Whilst I didn’t win AdTech legend of the year, that plaudit went to Paul Gubbins:
I still had a pretty late night & I have had a few glasses of Champagne… Happy bargain hunting & catch you all next week,
Simon
Jeff Green On Netflix With Ads
Connected TV advertising has been a massive area of growth in general & an area The Trade Desk (TTD) has performed spectacularly well in over the past 12 months, avails were up 10X YoY & spend in Q1 in the platform was up 2100% YoY (Not a typo). What this means is when TTD CEO Jeff Green talks about advertising in this space people listen:
Green believes if Netflix CEO Reed Hastings wants to compete with YouTube globally, because median household incomes are much lower outside of the US, the only way Netflix can do it is by offering a free-with-ads option. Green said. “the default will be to see ads, and most people would rather see, especially fewer, highly relevant ads, which is only possible through programmatic.”
Outside of global growth Green sees ad funded models as important for streaming services in general, as the drive to skinny bundles in western markets means that the cost of accessing premium content has gone up to a point where many are tapped out on subscriptions. Green believes this is why Hulu has been so successful in the US.
It is fair to say that Green has a vested interest in these models becoming more popular; In any two side market in order for TTD to continue growing, supply needs to keep pace otherwise the extra demand being reallocated from paid social could end up pricing advertisers out of the market & force money back into YouTube & Facebook.
Beyond this Green said in a recent earnings call that post the acquisition by AT&T he expected AppNexus to focus on building TV products & that TTD expect to remain a demand partner, other streaming services including a free-with-ads option would be a useful hedge against AT&T not playing ball & in any case will be critical to long term global growth even if they do.
YouTube Doubles Down On Pre-Roll Ads
Quite literally! The Mountain View giant has decided that for longer content it will show 2 TrueView ads back to back. My view of this is not positive:
According to Debbie Weinstein, VP of YouTube and video global solutions Google, developed "ad pods," that run before a video or in the middle meaning fewer interruptions in the middle of videos e.g. four ads in 2 pods as opposed to 4 separate ads.
The ad pods will only run on desktops, for now, but will expand to all YouTube's properties on mobile and connected TV devices next year. With ad pods YouTube is said to be making an attempt to talk the language of TV ad buyers, telling them the pods can help improve "reach and frequency".
I must say in the context of Connected TV podding makes sense; it’s lean back & consumers are used to seeing multiple ads in a break, in a mobile context though this type of podding definitely does not, there will be concerns from advertisers over the impact on view through rates & the move to some (myself included) & as it rolls out to mobile appears to be designed to interrupt in a way that drives subscriptions of their ad free product, in that context they are coming at the market from the opposite end of the spectrum to Netflix.
Is The IAB’s Consent Framework GDPR Compliant?
France’s data protection authority, the Commission has issued a warning against the French ad tech company called Vectaury that collects and processes Geo data. Though an SDK & by listening to the bid stream Vectaury was able to collect data on 67.6 million users derived from over 32,000 apps. The notice came because when the French data protection authorities audited Vectaury’s server logs, the company couldn’t provide a consent string through its CMP for every single ID.
It was reported by AdExchanger & others that Vectaury had implemented the IAB Europe Transparency & Consent Framework (TCF):
But yesterday the IAB Europe rebuffed this suggestion saying the investigation started prior to Vectaury ever registering itself as a TCF CMP. It went on to say that in addition, on many of the points on which Vectaury conduct is said to have violated GDPR it also violated the TCF’s policies. This is a must read:
It went on to say that had the company adhered to those policies, not only would it have been better-placed to meet its obligations under the law, but some of the most problematic of the concerns raised by the French data protection authorities would have been addressed.
Xaxis & Outcomes Based Buying
A recent of 5000 marketers globally by Xaxis has found that he most popular metric globally for evaluating digital spend was CPA. Interestingly globally almost as many marketers were using CPC & CTR to measure success & surprisingly slightly more marketers use CTR as a measure for success than CPA in the UK:
The majority (86%) thought their current metrics to be effective in evaluating the success of their campaigns, interesting those in Europe were least likely to be satisfied, although 70% were still pretty happy with the state of play. Despite this 76% were considering changing the metrics used to measure success, this was most true for marketers at companies investing more than $21 million in digital.
48% of marketers said increasing efficiency was their number one priority in 2019, which is positive for programmatic:
86% of marketers surveyed said they intended to increase their investment in ‘outcome-driven media which Xaxis will view as positive given this is how they’ve re-positioned themselves as an outcomes based business. It will be interesting to see how Xaxis balance the desire for transparency with an outcomes model, as this has always been a challenge for other outcomes businesses like Criteo. No doubt this will be a challenge but I think it’s likely they’ll work this out, ultimately Xaxis is a business with smart leadership & full of smart people.
Okay that’s another newsletter done. As always if you want to connect you can find me here:
Twitter: @SimonJHarris
LinkedIn: linkedin.com/in/simonjulianharris/
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Thanks & have a lovely weekend
Simon