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Two-thirds of publishers say video drives higher revenues

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Research commissioned by global digital media company, Dugout, finds two-thirds of publishers (72%) say video advertising can drive higher revenues for their business compared to other formats and channels, and 87% say it improves user experience. The research investigates where publishers and advertisers see opportunities for video advertising and explores the challenges to overcome to capitalise on these growth areas.

The research, conducted in conjunction with Digiday, asked publishers, agencies and brands about their views on the state of video; in particular the importance of video formats, the appetite for contextual advertising, life after third- party cookies, investment in VOD & OTT, challenges and obstacles to investment.

Value of video for publishers

According to the research, publishers are making the most of the growing numbers of global internet users able to stream and download high quality video content. An overwhelming 91% percent of publishers valued video content in their editorial strategy (25% say it’s highly valued, 50% say it’s valued and 16% say it’s somewhat valued). These views are clearly being put into practice, with 69% of publishers frequently or very frequently using video content to support editorial.

Video content also stands up favourably with publishers when compared to non-video editorial content. The research finds 62% of publishers say video content drives “a lot of engagement”; compared to the 44% of publishers who say this is the case for non-video editorial. Almost half (44%) of publishers say video content drives “a lot of shares”, compared to only 13% of publishers who say this for non-video editorial.

Value of video for advertisers

Advertisers – both brand and agency respondents – also emphasise the value of video. Just over half (53%) of advertisers say video advertising generates a higher ROI compared to other formats and channels. And when it comes to priority factors determining investment in video, the formats take the clear lead with 52%, followed by location (18%) and quality of the player (16%).

Challenges with video and obstacles to investment

When it comes to obstacles for video advertising investment, both publishers and advertisers are struggling with inventory. Having a sufficient supply of video inventory and generating that supply is a particular challenge for the publishers surveyed. An overwhelming majority (85%) of publishers say generating a sufficient supply of video inventory is challenging. When it comes to challenges of video advertising in practice, publishers and advertisers are aligned on the most important concern being quality of content, with 56% and 58%, respectively, citing this.

The importance of first-party data and context

Following recent efforts by internet browser companies and regulators to phase out third-party cookies, it might not come as a surprise that publishers and advertisers are considering alternative options. Advertisers recognise the importance of first-party data for understanding audience preference and behaviours, with 17% saying they use first-party data “very frequently” and 45% “frequently”. And publishers are increasingly bringing in insights from first-party audience data to influence their video strategy, with 9% doing this “very frequently” and 25% “frequently”. When it comes to context, 94% of publishers are actively considering contextual targeting options and 90% of advertisers are doing the same.

Rachel Powney, VP Marketing, Dugout said of the findings: “It’s positive news that both publishers and advertisers recognise the importance of quality video content to complement and enhance editorial strategies, drive audience engagement and boost the bottom line. And now, with comprehensive first-party audience profiles and improved contextual data to hand, publishers and advertisers have the ability to achieve ever-more effective video-based advertising.:

She adds: “Our research shows that advertisers are still understandably concerned about brand safety, and both parties highlighted issues they faced with the quality and supply of video content. When it comes to brand safety, block lists are widely used but they limit reach and engagement, therefore brands need to look more at the opportunities available with contextual targeting, working with vendors who offer brand safety, brand suitability, and sentiment analysis at a webpage level, for example.”

On the subject of video quality, Powney says: “When it comes to the quality of video content and the amount of supply available there needs to be more data transparency and processes and policies in place to ensure high quality content is available within brand safe environments – which we know drives audience engagement and ROI. The opportunities both advertisers and publishers see with OTT and streaming are somewhat optimistic – but still the biggest challenges for advertisers are navigating the fragmented landscape and making buying and measuring campaigns easier.”

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