Part one of a two-part series on improving video ad delivery as told by Pieter Mees, SVP of Engineering, Supply at DoubleVerify.
Before joining the DV Publisher Team, I founded an online video technology company named Zentrick nearly a decade ago. By the time we joined DoubleVerify in 2019, my team and I had explored many different aspects of online video, including the growing world of video ad tech. One of the most consistent issues I encountered was the shocking amount of ad breakage that was holding the industry back.
We define breakage as whenever a video ad is requested but not delivered as a billable impression. A quick internal study we conducted in 2018 indicated that publishers were reporting anywhere between 10% and 50% losses in video revenue due to various delivery issues. As a growing aspect of the overall revenue picture, we knew we had to dig deeper as part of our work on DV Publisher Suite.
The relatively small and fragmented nature of ad tech meant that any organization encountering these issues often lacked the time, data and resources to address them. Because of this, lost video revenue loss quickly became an accepted part of doing business. Could so much as a 50% loss in revenue be seen as a normal part of ad tech life?
So, how did we get here?
During that initial discovery period, we identified three defining characteristics of the video ad tech landscape:
- Misaligned incentives between different parties
- Complex and ephemeral value chains, reinforced by the rise of programmatic
- Lack of standardization, transparency and interoperability
These three industry-specific traits outline why breakage is such a problem in ad tech. If these traits were equally present in any other industry, I wouldn't be surprised to see similar revenue losses there too.
1. How misaligned incentives hurt publishers
When I talk to former colleagues about the ad tech industry, one thing I often note is that most people don’t get paid until there is an impression. But a lost impression looks quite different depending on your perspective.
A brand with a fixed media budget may not care all that much whether an individual ad impression ends up showing if they can just spend the same budget again on another impression until it runs. We’ve seen this in broken programmatic campaigns, where demand starts buying up inventory ever more aggressively because they just can’t spend their budget pool.
For the premium publisher that just missed the perfect opportunity to show a Martini ad to a vermouth-sipping high-earner however, the wasted potential is much higher. Will anyone “upstream” care if the publisher complains about this missed opportunity though?
Instances like this are masked by the fact that publishers see valuable opportunities in video advertising, despite the inefficiencies. However, a system where stakeholders have the tools to keep each other accountable can prevent situations where publishers are left accepting a lack of recourse and transparency.
2. Programmatic exacerbates the existing value chain problem
Second, the complex and ephemeral value chains. Every ad placement is like a micro-joint venture. The liability and possible returns may differ among the investors, but a conflict between any two of them leads to a certain default. As outlined above, a default hurts the publishers downstream before it impacts the buy-side.
The buyer-seller relationship in programmatic is detached to such an extent that publishers often don’t bother to try and fix breakage for specific advertiser creatives. Rather, they or their SSPs end up blocking that creative altogether once it starts breaking too much inventory. While this lost opportunity may be insignificant on a case-by-case basis, this process has remained the status quo for long enough to cause significant amounts of lost revenue.
3. Members of the VAST world, unite!
Third, lack of standardization, transparency and interoperability. As an industry scales and matures, it tends to strive for reduced costs and standardization, and ad tech is no different. Unfortunately, the testing and implementation of these changes have often fallen short for meeting publisher needs.
Organizations like the IAB TechLab are doing their best to introduce and maintain common language that can be used to build a sustainable ecosystem. Through the creation of standards like VAST, they’ve been able to bring most of the industry together to maintain interoperability. But even with those efforts, publishers are still experiencing significant breakage and user experience issues.
For more progress to be made, publishers need the data and insights to stake their claim on the ongoing conversations to improve these standards.
More work to be done
Ultimately, no matter what your role is in ad tech, I think it’s a safe bet to say you feel like you are spending a lot of time and resources on preventing and fixing breakage and incompatibilities, and indeed you are!
The causes of breakage and the hurdles towards fixing it are many, and publishers have historically chosen to allocate their limited resources elsewhere instead of tackling this complex problem. They’ve also lacked a true industry ally that had the time and resources to turn the tide.
So, what does the problem look like from a technical standpoint and what are we doing to turn things around? For that, stay tuned for the second part of our discussion. Have any questions or comments so far? Contact us!