SOLUTIONS FOR PUBLISHERS

FOLLOW
THE MONEY
MONETIZING DIGITAL VIDEO

bloomberg.com/content-service
SOLUTIONS FOR PUBLISHERS

Capitalize on an Emerging Opportunity

Digital video is a hot topic among online publishers looking to grow revenue. Prices for digital video ads have
skyrocketed, driven by unprecedented demand among advertisers and a scarcity of high-quality inventory. For
publishers looking to capitalize on this situation, mastering a few fundamentals and understanding the nuances of the
marketplace are important. This white paper explores the essentials of monetization that will help publishers build a
strong and lasting revenue stream.

THE MOMENT FUNDAMENTAL

TO MONETIZE FIRST STEPS

3 4

PROVING SUCCESSFUL
PERFORMANCE SELLING

7 9

bloomberg.com/content-service 2
SOLUTIONS FOR PUBLISHERS

THE MOMENT
TO MONETIZE
Digital video has captured the attention of online publishers around the world, from the
largest digital media enterprises and broadcasters to the most niche news sites and
blogs. It’s easy to see why. Revenues for digital video advertising are growing at an
astounding rate of 43.5% year over year.1

In short, advertisers can’t get enough digital video. Demand for digital video inventory
is at an all-time high, far outpacing supply. The format has achieved nearly equal status
to more traditional channels. In fact, 75% of U.S. ad agency executives said digital
video ads are equally or more effective than traditional TV ads, with 90% agreeing that
digital video ads had equal or greater impact than display ads.2 The format’s growth is
also attributable to an influx of new participants. As recently as 2013, 40% of video ad
impressions came from advertisers new to digital video.3

The result? CPMs for digital video ads are now 5 to 10 times higher on average than
CPMs for traditional display ads.1 These are economics that publishers simply can’t
ignore in an ultra-competitive industry.

Together, these factors create a sizable opportunity for publishers to provide the
high-quality content and advertising inventory that advertisers crave. But monetizing
that content is not simple. It requires publishers to master the fundamentals, measure
performance in meaningful ways and find the right monetization strategies.

SHIFTING
ATTENTION
Advertisers are
clamoring for digital
video ad inventory
because this is where
viewers are moving.

More consumers are watching Among 18-to-34-year-olds, Among those aged 35 to

video on tablets and mobile digital viewing was up 53% 49, rates of digital viewing
devices. in the past year according were up 80% over the same
to Nielsen.4 12-month period.4

bloomberg.com/content-service 3
SOLUTIONS FOR PUBLISHERS

FUNDAMENTAL
FIRST STEPS
Monetizing digital video successfully depends on attracting a consistent, reliable stream
of high-quality traffic. Publishers that can deliver high-quality impressions will find no
shortage of advertisers willing to pay for them. What follows are three steps publishers
need to take to maximize the quality and volume of traffic for digital video.

Engage Your Audience

From the advertiser’s perspective, engagement refers to how many ads viewers see
and how much of each individual ad they watch. From the publisher’s point of view, an
engaged audience visits a site more often, stays on it longer and watches more video
content. An engaged audience is naturally inclined to view more ads because they see
them as a fair trade-off for the quality of the content they are enjoying.

High-quality content is critical for engagement. Yet, even if publishers have compelling
videos to offer, other factors can affect how deeply the audience is engaged. Consider
the following:

• Duration. Shorter content tends to dominate in digital video, where users

frequently “snack” on clips of six minutes or less. Longer content may work,
but only if the audience expects it. If they don’t, they will leave—and the resulting
metrics will not meet advertisers’ expectations.

• Continuous Play. Continuous play automatically serves up an ad after a video

and then moves on to the next video (and the next ad) unless the user clicks
away. According to the head of advertising operations for a large global news
organization, continuous play leads to viewers spending more time actively
looking at the video player and engaging with more ads. One nuance to consider:
Autoplaying videos, which start automatically when the page loads, can hurt ad
performance. Users who are not in the mood to watch a video may quickly mute
or pause the player. Or, users may leave the video playing and, because it is not in
their viewport, they are not paying attention.

• Content Bundles. Bundles combine ad inventory from various types of content

on a publisher’s site—including videos, articles and data—related to a category
that advertisers tend to value highly, such as luxury. They are an important part
of the “traffic first” mindset and, by virtue of providing engaged, highly desirable
audiences, can support higher CPMs. Bundling can be difficult to do on a large
scale and across categories, however. Smaller publishers can license news,
photos or videos to increase the amount of content available to bundle.

bloomberg.com/content-service 4
SOLUTIONS FOR PUBLISHERS

FUNDAMENTAL PLAYER
FIRST STEPS PROFILES
Select the Right Technology
To ensure that an audience stays engaged with both the
content and the advertising, videos need to play quickly,
without buffering. Depending on a publisher’s technology
budget, development skills and site architecture, it can
either purchase an off-the-shelf video player or develop one YouTube is the second Adobe Flash Player is
independently. Each approach has its pros and cons. largest search engine a popular platform for video
in the world and a giant delivery, supported by one
Off-the-shelf platforms allow publishers to embed video social network in addition billion connected desktops.8
to its status as a free However, iOS and Android
content directly into mobile and web properties. These
content host. Its player do not support Flash,
platforms include a variety of familiar names. This approach
supports virtually all which has implications
is usually faster and easier, and the available players offer video formats. for publishers looking to
many choices in terms of functionality and support for different monetize mobile video.
video formats.

Building a player independently typically requires a larger

capital investment, but allows publishers to customize the
player for specific needs. Publishers may want to skin the
player to match their branding, for example, or support certain
analytics programs. Publishers also may choose to develop Flowplayer is a basic FLV Player is a streaming
a player in HTML5 or synchronized multimedia integration player that supports FLV, video platform that only
language (SMIL), both of which are markup languages offering one of the primary Flash supports FLV.
broader applications for website development. file formats, as well as
MP4 and F4V.
Other options include Adobe Flash, the software platform
used for creating multimedia that can be played with the
Adobe Flash Player, and Microsoft Silverlight, an application
framework with capabilities similar to Flash. Publishers
interested in mobile may choose to avoid Flash because
of compatibility issues with the iOS and Android platforms.
QuickTime is the JW Player is an open source
multimedia player that media player that supports
is built into Mac OS X. both HTML5 and Flash.
It is also available
for Windows.

bloomberg.com/content-service 5
SOLUTIONS FOR PUBLISHERS
FUNDAMENTAL
FIRST STEPS
Optimize the Viewing Experience
Because advertiser demand is so high and inventory is
so low, a great deal of digital video advertising is sold on
websites with less-than-ideal visual presentation. These
include everything from poorly designed sites that situate
video content at the bottom of the page to those that autoplay
videos on mute in an effort to boost impressions to those that
use “bot traffic” to defraud advertisers.
All of these examples indicate the size of the video
monetization opportunity. Advertisers are spending so much
on digital video ads that the market is drawing in those who
have no real interest in building an audience or delivering
high-quality video.
This gives publishers a significant opportunity to stand apart
from the competition—and command premium CPMs—by
creating a better overall viewing experience.
“An autoplay ad that sits below the fold is not a high-quality
experience for the viewer,” says the head of advertising
operations. “It’s tempting for publishers, because some
of these tactics will deliver more impressions. But it’s only
temporary. The metrics won’t be there in the long term, and
advertisers will not renew. You will have to earn new business
every time.”
A NEW ANGLE
ON VIEWABILITY
2
secs
bloomberg.com/content-service
Publishers are better off delivering high-quality video content
and making sure ads meet emerging standards for viewability.
There are no shortcuts.
Another way to optimize the viewing experience is through
companion ads. These include text, display ads, rich media
or skins that wrap around the video experience, running
alongside the video or the ad–or both. Companion ads create
a more cohesive experience for the viewer and give advertisers
more sustained visibility. These ads benefit sites with smaller
embedded players because they provide a secondary, more
visible branding message that makes the
site more attractive to advertisers.
Aligning ads with the content on the page is another useful
tactic—for example, placing ads for credit cards on a page
about financial services. Ads should also fit well with
audience demographics. This helps publishers serve ads
to qualified users who are primed to view the ad instead
of being surprised or confused. (Think about a site that
serves young professionals showing badly targeted ads for
reverse mortgages or retirement homes.) Unifying content
and advertising also reduces the risk of unintended thematic
conflicts, such as a fast food ad running before a video about
healthy eating.
Until recently, there were no standardized criteria for
assessing an ad’s viewability. This is no longer the case.
In the summer of 2014, a combined effort by the Interactive
Advertising Bureau (IAB) and the Media Rating Council
(MRC) established the first guidelines for viewability of
in-stream video ads.
These guidelines define “viewable display ad impressions”
as those in which at least half of the pixels in the ad are
on an in-focus browser tab on the viewable space of
the browser page for at least two continuous seconds.
Other user interactions, such as a click on an ad, can validate
the ad’s viewability as well.
Publishers can download the complete document at
mediaratingcouncil.org.
6
SOLUTIONS FOR PUBLISHERS

PROVING
PERFORMANCE
When publishers engage audiences effectively through a combination of superior
content, reliable technology and a seamless viewing experience, they can attract and
retain high-quality traffic. In the world of digital video, measuring the potential value of
this traffic requires metrics. To monetize digital video effectively, publishers need to
understand and use metrics.

Find What Works

First, publishers should use metrics to identify how best to engage audiences with ads.
Test different advertising formats to understand how pre-roll ads stack up against in-
stream ads. Test various configurations, such as multiple pre-rolls, multiple mid-rolls and
multiple ads in between videos in a playlist. Test skippable and non-skippable ads. All of
this data will help publishers offer the right mix of inventory that will keep viewers—and
advertisers—coming back for more.

“Pre-roll is not the only answer,” says the head of advertising sales at a major news
site. “Think mid-roll, too. As more and more people stream live TV over the web or
simply watch more short videos in a row, mid-roll ads work just like traditional TV
commercial breaks.”

Quantify Your Performance

Next, publishers should use a video analytics program to measure the performance of
their own content and the attendant ads. These programs are available from a variety of
providers, including comScore, Adobe Marketing Cloud, Ooyala, Brightcove, Anvato,
Visible Measures and Google Analytics. Key metrics include:

• Video page views (views of the page where the video lives)
• Video views (total and per visitor)
• Total hours viewed per visitor
• Percentage of visitors watching video
• Unique visitors watching video
• Average number of clips watched among all site visitors
• Average number of clips watched among visitors who watch video

With a solid understanding of which types of content and ads perform best, as well
as an engaged, high-quality audience, publishers can sell to new advertisers more
effectively, build a stronger case and increase both first-time and repeat sales through
reliable performance.

bloomberg.com/content-service 7
SOLUTIONS FOR PUBLISHERS

PROVING
PERFORMANCE
Narrow the Focus
Publishers that have the metrics to back up their claims about digital video performance have an automatic advantage over those
who do not. One point to remember, however, is that while metrics are vital for getting publishers and advertisers on the same
page as to what constitutes success, they can also be a source of frustration, according to the head of advertising sales.

“Advertisers get overwhelmed with metrics,” he says. “There are so many things to consider. They don’t always know what to
look for or how to use metrics to understand viewer behavior.”

Publishers will be well-served by making life easier for advertisers. Publishers should focus on the metrics that matter most to
clients and build a compelling case for higher CPMs that takes the advertiser’s point of view into account. Four of the metrics
publishers should focus on:

• Completion Rate. This refers to how much of the ad
was viewed; it is a metric that gets advertisers’ attention.
Specifically, advertisers want to see completion rates of at
least 50% and sometimes as much as 75%. While it’s true
that creative ads naturally achieve higher completion rates,
publishers need to do their part. By creating digital video
experiences that are seamless and cohesive, publishers
will insulate themselves from advertisers’ attributing low
completion rates to site quality.
• Click-through Rate. This metric is a carryover from
web-based display advertising for which the click-through
was the most desired user action. Advertisers still favor this
metric, even though it is only relevant for ads that are
click-through enabled.
• Viewability. According to the head of advertising
operations, viewability is an “up and coming” metric because
of the recent standardization efforts of the IAB and MRC.
While not all advertisers expect to see these standards
met today, publishers that can demonstrate compliance
will be better positioned for the long term. Meeting standards
before they become mandatory also signals to advertisers
that publishers are forward-thinking and understand the
difference between a low-quality and high-quality
viewing experience.
• Frequency. This refers to how often a viewer sees the
same ad. If publishers have limited inventory and want to
close a large ad buy, they may wind up selling a large chunk
of inventory to one advertiser. Viewers then see the same
ad repeatedly, which can compromise the experience. For
smaller publishers, this may be a chicken-and-egg situation,
but those who can demonstrate lower frequency rates will
be more attractive to advertisers.

bloomberg.com/content-service 8
SOLUTIONS FOR PUBLISHERS

SUCCESSFUL
SELLING
When publishers have the fundamentals in place and have the metrics to prove it, the
next step toward successful monetization is building a robust sales strategy. Generally
speaking, there are two paths to follow: direct and automated ad sales. Each has its
advantages and drawbacks, and most publishers will likely use both. The challenge is
finding the right mix of techniques to maximize revenue in the short term while building
strong, long-term relationships with advertisers.

Direct Sales
Direct sales methods deliver a higher CPM than automated solutions because they do
not involve revenue sharing with an ad network or exchange or any other third party,
such as a marketing data provider. These higher CPMs come with an obligation to
deliver the impressions promised to advertisers, thus direct sales are a better fit for
publishers that have a large, well-defined audience.

For publishers that can deliver the audience, the next consideration should be the
amount of video inventory available for sale. Too little inventory can lead to the frequency
issue mentioned earlier. Showing the same ad repeatedly can compromise the viewing
experience, which can affect performance metrics, causing a chain reaction that makes
it even more difficult to meet impression targets and get repeat business. As long as
publishers understand how these factors influence one another, they can make better
decisions about selling on a CPM basis.

Sponsorships
For smaller publishers that are still building an audience for video or do not yet have a
sizable number of impressions to sell, sponsorships are a sensible strategy. Because
sponsorships give advertisers a 100% share of voice on a site, they can deliver a highly
effective brand experience to a smaller but often more passionate audience. The key
difference from selling on a CPM basis is that sponsorships don’t require publishers to
deliver a certain number of impressions.

For larger publishers, sponsorships don’t usually make as much sense. They may
generate a great deal of revenue, but they limit the site to too few advertisers. Larger
enterprises are better off selling on a CPM basis to ensure a greater variety of ads and
to avoid viewer fatigue.

bloomberg.com/content-service 9
SOLUTIONS FOR PUBLISHERS

SUCCESSFUL NEW DIGITAL VIDEO

SELLING
Content Bundles
Similar to sponsorships, content bundles help create
more attractive and efficient offerings for advertisers.
Again, bundles combine ad inventory from all the videos,
articles and data connected with a specific ad category.
These bundles allow advertisers to achieve a higher total
number of views and combine metrics from different
types of ads into a single, predictable, blended CPM.
Bundles also make it easier for advertisers to
find the best fit for their brand without having to assess
the value of each piece of inventory.
STANDARDS
The Interactive Advertising Bureau (IAB) is an industry-
led organization devoted to helping media and marketers
make the most of digital channels. To promote in-stream
digital video advertising, the IAB’s Digital Video Committee
published the IAB Video Suite, a set of technical
specifications for in-stream video ad formats that allow
compliant ads to play smoothly on compliant publisher sites.
The suite includes:

To streamline bundling for publishers, the Bloomberg

Content Service offers video and other content
packaged in highly desirable verticals such as business,
technology, investing and luxury.
Video Ad-Serving Template (VAST), a universal protocol
for serving video ads that enables ad servers to use one ad
response format for multiple publishers and/or video players.

Automated Sales
Automated solutions for selling digital video ad inventory
include ad networks and exchanges. These offerings
make it much easier for publishers to move available
inventory, but they involve revenue sharing. This is Video Player-Ad Interface Definition (VPAID),
an important trade-off to consider, especially for a common communication protocol between ad units and
publishers that are growing rapidly. The key is finding video players that facilitates richer experiences and more
detailed reporting.
a happy medium between leaving too much inventory
unsold and selling all the inventory on a site but not
maximizing profitability.

In general, automated selling solutions are geared

toward publishers that lack the large internal sales teams
required to move large volumes of inventory. However,
in some cases, they can be helpful for large publishers
that have so much inventory that they can’t sell all of it
quickly enough.
Video Multiple Ad Playlist (VMAP), a protocol that
helps content owners describe where ad breaks should
be placed in content for instances when they do not
control the video player.

bloomberg.com/content-service 10
SOLUTIONS FOR PUBLISHERS
SUCCESSFUL
SELLING
Ad Networks
Ad networks aggregate inventory from multiple
publishers and provide an easy way for advertisers to bid
on that inventory, often at a rate that is greatly discounted
from a publisher’s direct sales rate. Well-known ad
networks include the Google Advertising Network,
BrightRoll, LiveRail and SpotXchange. Publishers may
find that working with several of these networks can
help fill available inventory more efficiently.
Ad Exchanges
Ad exchanges, also known as programmatic ad buying,
apply the same concept but give publishers more control
over prices, inventory blocks and acceptable advertisers.
In other words, not just anyone can buy the ads and not
at prices that publishers deem too low. Exchanges do
require publishers to set up a supply-side platform (SSP)
capable of serving inventory to the advertisers that bid
on it. Some of the more well-known exchanges include
Google’s Invite Media, MediaMath, Turn, DataXu
and [x+1].
bloomberg.com/content-service
Programmatic Reserves
Surging demand for digital video inventory among
advertisers is creating new options beyond these
exchanges, according to the head of advertising operations.
“Advertisers want to buy programmatic video but it’s
often unavailable to them,” she says. “So the industry has
developed programmatic reserves, where an advertiser
agrees up front to buy whatever inventory the exchange
can find.”
Programmatic reserves deny advertisers the opportunity
to pick and choose audience targets, but many are willing
to make this compromise. The dynamic works well for
publishers, because they can avoid offering inventory
programmatically and then watch it go unsold because it
didn’t meet the advertiser’s specific demographic needs.
11
SOLUTIONS FOR PUBLISHERS

CHOOSING THE RIGHT MIX OF DIRECT AND AUTOMATIC SELLING

IS VITAL FOR SUCCESSFUL MONETIZATION

Direct Sales No revenue sharing Automated Solutions

Higher CPMs Lower CPMs

Requires sales force No sales force required

No revenue sharing Revenue sharing

Sales burden on publisher vs. Sales burden on network/exchange

Direct contact with advertisers No contact with advertisers

More process control Less process control

Better for larger publishers Better for smaller publishers

THE TIME IS NOW

There has never been a better time for publishers to monetize digital video. Demand for ad inventory
now far exceeds supply—to the point that industry experts believe CPMs may soon reach an all-time
peak. To make the most of this moment, publishers need to master the fundamentals, measure results
to demonstrate performance and find the right mix of direct and automated selling solutions. Underlying
all of this is the need to deliver high-quality video. Creating compelling content is not easy, which is
why inventory remains limited. With quality content aligned with the right brands, publishers can add
a reliable, high-value revenue stream and compete more effectively.

bloomberg.com/content-service 12
SOLUTIONS FOR PUBLISHERS

GET STARTED TODAY

Monetizing digital video is easier with the right content. The Bloomberg Content Service
licenses high-quality video, news, data and photos covering topics attractive to advertisers.
To learn more, visit bloomberg.com/content-service.

About the Bloomberg Content Service

Bloomberg Content Service is a leading provider of global business and finance video,
news, photos and data for more than 1,000 media outlets in 60+ countries.

Endnotes:
1. K. Olmstead, A. Mitchell, J. Holcomb, and N. Vogt, “The Digital Video Advertising Market,” Pew Research Journalism
Project, March 2014. http://www.journalism.org/2014/03/26/the-digital-video-advertising-market/

2. eMarketer Digital Video Roundup, July 2013.

3. Insights from DoubleClick, “Video advertising momentum,” DoubleClick by Google, Spring 2013.
http://www.thinkwithgoogle.com/collections/video-advertising-momentum.html

4. J. O’Neill, “Online video consumption up, TV viewing down among Boomers, too,” Ooyala Video Mind, September 2014.
http://www.ooyala.com/videomind/blog/online-video-consumption-tv-viewing-down-among-boomers-too

5. Ooyala Global Video Index Q2 2014. http://go.ooyala.com/wf-video-index-q2-2014.html

6. Adobe Flash Statistics. www.adobe.com/products/flashruntimes/statistics.html

7. IAB Interactive Advertising Wiki. http://www.iab.net/wiki/index.php/Companion_Ad

>F
 or all inquiries, visit bloomberg.com/content-service
bloomberg.com/content-service
The data included in these materials are for illustrative purposes only. ©2014 Bloomberg L.P. All rights reserved. S534486253 DIG 1114