demystifying premium - freewheel · social networks or long-tail video sites). many claim, but very...

1 FREEWHEEL COUNCIL / DEMYSTIFYING PREMIUM / #PremiumVideo

SEPTEMBER 2018 #PremiumVideo

DemystifyingPremiumTHE KEY ATTRIBUTES OF PREMIUM VIDEO


THE CONCEPT OF THE WORD “PREMIUM” HAS SUFFERED

from a lack of consistent definition since the dawn of digital advertising and has been applied universally as a sales and marketing tactic to create appeal to advertisers. It is often said that premium is in the eye of the beholder, and the price of advertising will often come down to what an advertiser is willing to pay for an opportunity to get in front of a target audience. However, the value of the audience is only one element of the premium equation. Whilst important to a brand’s overall strategy, building ongoing brand values and affinity with consumers over the long term is arguably the primary goal in any sustainable engagement between brands and consumers. If the past couple of years have taught us anything, it is that the quality of environment and ultimately, the results or the return on investment (ROI), are what matter.

The past few years have been a jolting experience for many brands as they encountered quality issues among buys, some of which were from exchange-based platforms and some from supposedly trustworthy sources. The shift towards audience-only buying that the digital revolution has facilitated, has created

some efficiencies, but it has also created risks. When considering audiences as “premium”, the viewer (sometimes not actually a human) can no longer be considered in a vacuum—the environment is critical, not only in terms of brand safety but also transparency, verification and the likelihood to drive business outcomes.

Premium video—which is a TV or TV-like environment, both linear and digital—is a powerful advertising environment, yet buy-side investments are often limited by the perception that TV is challenging to access, or prohibitively expensive. At the same time advertisers are lured into quick, easy and apparently low-cost, lower quality digital advertising options. It’s only once they look deeper and start to scrutinise results that they begin to understand that some of these platforms lack efficiency of long-term brand building or driving positive ROI and worse still, may even present a risk to brand reputation.

While there may be some truth in the view that premium video is more complex than other digital advertising, it is ultimately far more effective at driving genuine brand outcomes in both the short- and long-term. It is also becoming more simple and affordable all the time.

This paper demystifies the term “premium”, taking a deep dive into what it takes to justify its name, how premium video differentiates itself from non-premium media and using research from multiple markets to illustrate how it is more accessible and worthy of greater investment.

Executive Summary

Premium is content and context that add value in the eyes of the viewer. So, something that makes it premium is something that makes it more valuable.

Phil Smith Director General, ISBA

Watch the Interview

https://vimeo.com/283968039


Key Takeaways

• Many claim “premium”, but not everyone offers premium advertising opportunities. “Premium” entails a specific set of attributes that drive business outcomes.

• Five key attributes of “premium” are:

• TV advertising has evolved to enable new transaction models and access to high quality, engaged audiences at scale.

• Premium video delivers the largest short- and long-term multiplier of ROI for brands.

• Brands should question the ubiquity of the term “premium” and make no compromises when it comes to investing in premium inventory.

Redefining Premium: What Makes it Premium?

PREMIUM VIDEO IS PROFESSIONALLY-PRODUCED VIDEO CONTENT, DELIVERED VIA CURATED USER EXPERIENCES, IN A BRAND-SAFE CONTEXT TO HIGHLY ENGAGED AUDIENCES.

Accessed via any screen, it is often viewed within multiplatform TV including broadcaster video-on-demand (VOD) and over-the-top (OTT) platforms (with limited presence within video aggregators, social networks or long-tail video sites).

Many claim, but very few can deliver on the promise of premium: premium video is defined by its quality and the attributes that make it different from other types of video content, including brand safety, transparency, engagement, trust and quality reach.

1

Brand Safety

2

Transparency

3

Engagement

4

Trust

5

Quality Reach


BRAND SAFETY CAN BE A CHALLENGE IN DIGITAL ADVERTISING WHERE AUDIENCE-ONLY OR audience-first models mean advertisers and agencies often have no idea of environment, opening up the possibility of ads appearing next to inappropriate content.

Premium video is different because content is expertly curated and only features in high-quality, sought-after environments that are complementary to brands and their values. When discussing VOD at an event in May 2018, Matt Hill, Research & Planning Director of Thinkbox1, explained:

These rules are designed to protect consumers, but simultaneously protect advertisers, ensuring a brand-safe environment.

The exponential growth of the digital ecosystem has brought with it the need for control and safety measures. Fraud, driven by poor quality inventory, is extracting significant value from the industry and is badly damaging performance. It is time to focus energy away from risk mitigation and towards quality media environments that will drive campaign success. In an interview with Beet.TV in June 20182, John Montgomery, GroupM’s Global EVP of Brand Safety, explained:

Brand SafetyATTRIBUTE 1

On-demand TV content is 100% brand-safe because it is regulated by the same broadcasting code that applies to linear TV, applying strict rules around harmful or offensive content, impartiality, and accuracy of information.

Matt Hill Research & Planning Director, Thinkbox

1. https://www.thinkbox.tv/News-and-opinion/Events/Watch-Broadcaster-VOD-The-Bigger-Picture

2. https://www.beet.tv/2018/06/john-montgomery.html

By buying better quality, the CPM may be higher but it will be worth it. We’ve done a lot of studies proving that brand safety not only limits risks, but it works better. Buying quality actually sells, and this is where we think we should take the conversation to, after brand safety becomes table stakes.

John Montgomery Global EVP of Brand Safety, GroupM

Watch the Interview

https://www.beet.tv/2018/06/john-montgomery.html


3. The new marketing landscape: How TV can take advantage of change, Ebiquity

Philippe Boscher Head of Digital Marketing & Innovation,

TF1 Publicité

Watch the Interview

One thing that brands should never compromise on is transparency. There is no trust, no campaign monitoring, no optimisation, if there is no transparency.

THE NEED FOR TRANSPARENCY HAS PERMEATED THROUGH

the entire advertising industry, with brands demanding a clear understanding of where and how their advertising budgets are being spent. An Ebiquity report3 illustrates that, in some cases, only 15 cents of every euro spent in programmatic digital media trading reaches the intended audience. The majority goes to intermediaries, and in some cases, further value is eroded by non-viewable inventory or fraud. Without transparency there is diminished accountability, and without accountability there is an inevitable loss of trust and confidence.

TransparencyATTRIBUTE 2

3. The new marketing landscape: How TV can take advantage of change, Ebiquity, 2017

The need for transparency goes the other way as well, with premium publishers and broadcasters standards requiring ad creative clearance to ensure the consumer experience is of the highest quality. This has ramifications on the transaction itself, with premium video players transacting the majority of their inventory via direct sales and private marketplaces, as opposed to open auctions and exchanges where controls and transparency levels are lower. This also creates more predictability for delivery on both sides. With premium video, buyers know exactly who they are dealing with and precisely where their budget is being spent. The need for control over supply and compliance means that premium video is mostly transacted via private marketplaces, and often served within the closed environments of OTT and VOD.

Premium Video & Transparency: The Inverted Transactional Pyramid

PREMIUM VIDEO

DIRECT DEALS

MANUAL

SEMI-AUTOMATED

AUTOMATED

PROGRAMMATIC GUARANTEED

PREFERRED DEALS

PRIVATE AUCTIONS

OPEN AUCTIONS

TRANSPARENCY

CONTROL

PREDICTABILITY



WHILE THE QUALITY OF LINEAR TV HAS ALWAYS DRIVEN engagement, on-demand premium video capabilities add a new dimension. Viewers are in control, choosing the shows they want to watch, at a time that suits them, making them further engaged with the content and receptive to the ads associated with it.

The highly engaging nature of premium video is illustrated by the outstanding completion rates it achieves. The UK’s recent “Bigger Picture” research4 (involving Sky, Channel 4, ITV and Thinkbox) reveals the average view-through rate (VTR) for VOD is 93%, while separate Channel 4 research5 reveals ads served on its All4 platform achieve a completion rate of 96%, compared with 59% or even 17% on some digital platforms.

Premium video truly delivers on time-spent metrics because it is based on a fair value exchange where viewers are willing to watch quality ads to gain access to extremely high quality, made-for-TV content.

Premium video also drives more attention than other types of digital video, which is vital for consumers to engage with advertising messages. A 2017 report from Think TV6 reveals the attention an average second of active video content commands on various platforms. TV content captures 58% attention, while video sharing or social platforms only command 31% and 4% attention respectively. Channel 4 research5 also describes the distracted attention state as “the enemy of advertising,” revealing the level of distraction time for online platforms as being 3.1 times greater than the more immersive the All4 platform.

This disparity is due to multiple factors such as the emotional engagement with the content, the quality of the ad creative as well as the device and the screen coverage achieved by premium video. Progressive buyers have started to use enhanced viewability and quality metrics, such as screen coverage and field of vision, as a way to value media opportunities.

EngagementATTRIBUTE 3

4. https://www.skymedia.co.uk/news/broadcaster-vod-the-bigger-picture/

5. https://www.4sales.com/not-all-vod-same

6. https://thinktv.com.au/wp-content/uploads/2017/08/ThinkTV_media_attributes_that_matter.pdf

UK Ad Completion Rates “Bigger Picture” Research Study

96% 59% 17%

All4 Platform Digital Media Platform Social Media Platform


7. https://cmocouncil.org/thought-leadership/reports/engage-at-every-stage-an-investigation-of-video-activation

QUESTIONS ARE BEING RAISED OVER THE ACCURACY

and trustworthiness of digital verification models, with some social platforms making multiple announcements about incorrect, inaccurate or incomplete metrics specific to video viewership and placements. According to a 2018 CMO Council survey,7 24% of marketers have already reduced spend due to false or faulty verification metrics.

But it’s not just a case of whether advertising metrics are trustworthy or not, it is also about whether the metrics used are the ones that matter. Industry standards present a low baseline against which to measure elements such as viewability, with digital ads deemed viewable if half the pixels are in view for a couple of seconds—a standard only 3%7 of marketers are satisfied with. Rather than focussing on this basic measurement, advertisers can make use of far more powerful metrics such as completion rates and whether the ad was both audible

and visible, which gives a more meaningful indication of audience engagement.

As illustrated in Chart 1 below, recent research by SevenOne Media / Payback demonstrates the power of both sight and sound together in terms of emotional engagement.

With the proliferation of screens and viewing platforms, TV measurement models have become more sophisticated. The attribution of the true value of media is better understood, and it is increasingly clear that premium video delivers results that were previously attributed to other media.

Brands not only trust verification within premium environments and their innate quality, but increasingly they can also place their trust in the fact that premium video investment will drive value in terms of results.

TrustATTRIBUTE 4

CHART 1

The Power of Sound

Video Ad - Consumer Electronic

Enjoyable

20% 30% 40% 50% 60% 70%

Likeable

Serious

Informative

Attractiveness

Video Ad - Automotive

Serious

20% 30% 40% 50% 60% 70% 80%

Attractiveness

Informative

Likeable

Enjoyable

* Question: Using a scale from 1 (“I agree entirely”) to 5 (“I do not agree at all”), please evaluate to what extent the following descriptive words best apply to the video ad

Base: 300 Adults aged 18 to 49, equally spread gender, 3 spots exposure followed by online survey.

Source: SevenOne Media / Payback

VIDEO ONLY AUDIO ONLY AUDIOVISUAL

Percentage for Top Two Responses* Percentage for Top Two Responses*


SCALE AND REACH ARE FUNDAMENTAL TO THE SUCCESS OF advertising; after all, brands must reach their audiences in a meaningful way to grow their business, and premium video is increasingly able to fulfil this need of delivering scale and simultaneous reach efficiently.

The average consumer is exposed to 21 minutes1 of video advertising per day, with TV—including playback TV and VOD—accounting for around 95% of that viewing time. In contrast, advertising on the largest online video platform only accounts for 0.9% of that 21 minutes; a mere 11 seconds.

With the rise of VOD and OTT via connected TV’s, premium video consumption increasingly takes place on the big screen, and is fully integrated into the TV experience, with 38% viewers watching broadcaster VOD on the television set according to the FreeWheel Video Monetization Report: Q1 2018. This shift back to the living room environment transforms premium video into a multi-viewer experience,

where several members of one household are exposed to the advertising message simultaneously.

Channel 4 and ITV’s research8 revealed TV screens are watched by an average of 1.6 people, meaning that for every 1,000 TV impressions advertisers buy, their message is actually reaching an additional 600 individuals. This multiplier varies by show: for example, advertising around The Great British Bake Off is viewed by 2.1 people per impression1.

The multi-viewer experience of premium video watched on the big screen not only increases real audience reach, it also makes advertising more effective. Sky Media1 discovered that watching content with other people leads to higher engagement with and enjoyment of that content. When viewing content together and on the big screen, viewers are happier and more energised, which has a halo effect on the brands advertising around that content.

Quality ReachATTRIBUTE 5

8. https://www.itvmedia.co.uk/why-itv/research/bvod

CHART 2

Average Video Advertising Time Per Day8 All Individuals: 21 mins16-34s: 14 mins

YOUTUBE

OTHER ONLINE VIDEO

CINEMA

BROADCASTER VOD

PLAYBACK TV

LIVE TV

16-34sAll Individuals

0.9%

3.9%

0.4%

2.5%

6.6%

85.8%

2.9%

6.3%

0.7%

4.8%

9.0%

76.3%

http://freewheel.tv/insights/#video-monetization-report


PREMIUM VIDEO MAY BE SEEN AS UNATTAINABLE, ESPECIALLY FOR SMALLER ADVERTISERS, WHO

may feel they cannot afford it. But choosing to invest ad budgets in lower-quality media is a false economy.

Premium video is a more limited commodity, accounting for just 9%9 of all video starts, so basic supply and demand dynamics, as well as its quality, make it more highly sought after. But premium video provides substantial value. When other factors such as completion rates, attention levels, return on investment, and long-term impact are considered, advertisers can achieve far more with premium video than with digital advertising, using the same budget.

For additional perspective, through a programmatic lens, you can watch an interview of Anna Forbes, Managing Director UK, The Trade Desk here.

An Ebiquity and Radiocentre research project10 explored the ROI of a variety of advertising media and its normative data on profit ROI and determined that TV yields the best returns overall:

• Every £1 spent on TV (premium video environment) makes £1.73 profit • Every £1 spent on online video makes £1.21 profit • Every £1 spent on online display makes £0.82 profit

When the ROI of advertising media is measured, the tendency is to focus on the short-term, looking at the immediate impact of investment during a campaign and for the three-to-six months following its completion. But in reality, less than half of advertising’s profit occurs in this short-term period; Thinkbox research11 concluded that the majority (58%) of profit return happens after the initial six-month period.

Is Premium Worth It?

Digital advertising has encouraged a short-termist approach to marketing, where the focus is delivering information to the audience at the lowest possible cost, without considering the effectiveness and whether it will drive the required brand outcomes. Digital has stimulated the direct response market where immediate performance metrics are more important than long-term strategy.

Morten Bruhn Hojsgaard Managing Director, iProspect, Dentsu Aegis Network

9. http://freewheel.tv/freewheel-views/the-premium-video-opportunity-infographic/

10. https://www.radiocentre.org/re-evaluating-media/

11. https://www.thinkbox.tv/Research/Thinkbox-research/Profit-Ability-the-business-case-for-advertising



Only by looking at the combined short- and long-term effects of advertising can one see the entirety of each medium’s contribution to profitable return. According to the Thinkbox research, this would translate as follows:

• Every £1 spent on TV makes £4.20 profit over three years • Every £1 spent on online video makes £2.35 profit over three years • Every £1 spent on online display makes £0.84 profit over three years

CHART 3

Proportion of Advertising-Generated Profit by Medium

Note: Online Video includes Broadcaster VOD, YouTube, Facebook video & online programmatic video

Source: Profit Ability: the business case for advertising, Nov 2017

Ebiquity ROI campaign database (Feb 2014-May 2017) & Gain Theory. Campaign obs: 1,954

Bubble size represents % of total profit.Total profit = all return (short & long-term) generated over 3 years.

PRINT ONLINE VIDEO RADIO OOH ONLINE DISPLAYTV

0%

10%

20%

30%

40%

50%

60%

70%

£0.00 £0.50 £1.00

BREAK EVEN

TOTAL PROFIT ROI EFFICIENCY

% O

F B

UD

GE

T

£1.50 £2.00 £2.50 £3.00 £3.50 £4.00 £4.50 £5.00

1%

3%

3% 4%

18%

71%


TV delivers the largest long-term multiplier of all media types, so while advertisers may see the initial cost of premium as comparably high, they could miss out on maximising advertising-generated profit by under-investing in premium environments.

Simon Bevan Chief Investment Officer, Havas Group

WHEN BRANDS OR AGENCIES INVEST IN ADVERTISING THERE ARE FIVE KEY ELEMENTS THEY SHOULD

never compromise on, and if all the boxes cannot be ticked by an advertising partner, the value should be questioned:

• A brand safe environment • Complete transparency • An engaging ad experience • Trust through certified third-party verification • Sufficient scale and reach (based on goals)

Brands should be skeptical about the ubiquitous term “premium” and query supplier claims to that descriptor. Premium video has the traditional strengths from its broadcast heritage of reach and engagement, in a high-quality environment. It combines these with new digital advances in data, targeting and measurement, bringing together the five key elements into one package. And it does this in a way that drives real business outcomes in both the long and short-term, offering value to advertisers that cannot be provided by any other medium.

Ultimately premium video, in all of its incarnations, represents the most compelling environment for brand marketers to drive results, and the worthiest marketing channel of its name.

Conclusion: The Non-Negotiables of Advertising

Advertisers could spend less per impression on other digital media but will require far more impressions to achieve the same goal, potentially making this a costly strategy if not a poor user experience, due to increased frequency. For smaller advertisers, advances in premium video such as programmatic and addressable TV help to keep costs manageable and allow them to focus on more specific audiences.

When considering its innate qualities and ability to drive outcomes, the value of premium video is undeniable.

The FreeWheel Council for Premium Video Europe (FWCE) was formed in June 2017 to

serve the interest of those in the premium video industry through leadership positions,

research, and advocacy. Aligned to the FWC formed in North America in 2015 (with

members such as ABC, Fox and NBCUniversal), the FWCE consists of 17 members:

Canal+ Régie, Channel 4, Discovery Networks International, European Broadcaster

Exchange (EBX), France Télévision Publicité, Medialaan, Publitalia, NENT Group,

Proximus, RTÉ, Sanoma Finland, SevenOne Media, SFR Régie, Sky Media UK, Sky Media

Germany, Talpa and TF1 Publicité. Across both Europe and North America, the FWC

operates as an educational and organising resource to assist marketers to reach desired

audiences in premium video environments, conduct research documenting the benefits of

premium video and represent the interests of member publishers and the market.

For more information on the FreeWheel Council for Premium Video please visit www.FreeWheel.tv/FWCouncil and follow us on Twitter @FWCouncil.

About The FreeWheel Council for Premium Video, Europe (FWCE)

InquiriesEmmanuel Josserand [email protected]

FreeWheel [email protected]

@FWCouncil

©2018 FreeWheel. All Rights Reserved.

THANK YOU TO THE FREEWHEEL COUNCIL FOR PREMIUM VIDEO, EUROPE MEMBERS AND PARTNERS who contributed to this paper. You can watch the full series of interviews with Phil Smith (ISBA), Anna Forbes (The Trade Desk), Etienne Bodel (Dentsu Aegis Network) and Philippe Boscher (TF1 Publicité) about their views on Premium Video here.


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