SQADPOD: 5 Game Changers Every Advertiser Should Know – November 2018
Industry news and insights podcast curated from the world of advertising and marketing trends.
2019 is quickly wrapping up and the holiday season is in full swing. The air is filled with winter spices and twinkling lights are popping up everywhere. As we unpack our festive decorations and prepare for celebrations with family and friends, we’re also looking at the news and trends in the advertising world. This month, we’re diving into Stories, Roku’s advertising plans, ad tech transparency, Disney+, and the first-ever programmatic VR campaign.
- Facebook Stories: An Advertising Fairy Tale?
- Roku’s Strategic Pivot to Advertising
- Increasing Ad Tech Transparency
- Disney+ is a Plus
- Bringing Programmatic Ads into VR
1. Facebook Stories: An Advertising Fairy Tale?
Facebook is betting big and claiming that their Stories feature is the next frontier of social media advertising. Now that the feature is available across their platforms including Instagram, Messenger, and WhatsApp, Facebook’s robust advertising service believes Stories will be even bigger than Timeline advertising. Stories are photos and videos uploaded in the vertical format that disappear after 24 hours, and are meant to be a fleeting glimpse into the lives of users (a blatant clone of Snapchat’s core feature). Facebook is selling advertisers on Stories because of the reach across all of Facebook’s verticals, which amounts to about one billion Stories per day. Ads appear innocently in between Stories users are browsing, and are so quick, that they’re done before you have time to skip them. The scale and promise of this platform is an advertiser’s dream, but it may take some time before they are a reliable source of lead generation and tangible ROI. If Facebook is right, and Stories are the next big ad channel, it’s only a matter of time before advertisers saturate the feature, users get annoyed, and Facebook is forced to find other social media marketing avenues. Until then, expect to see Facebook driving users to engage with Stories, and a lot more ads popping up there.
2. Roku’s Strategic Pivot to Advertising
Nowadays, it’s all about over-the-top. It’s OTT this, OTT that. But is a solely subscription-based streaming service truly sustainable over time? Roku, who made its name in video streaming, believes the future of OTT lies in a combination of ad-free streaming subscriptions and ad-supported services. Roku’s GM of the Platform Business reports that the service is seeing an uptick in ad-supported viewing across all demographics and income levels, which is why it is slowly but surely transforming itself into an advertising business, without having to rely on streaming alone. In addition to being a distribution platform for apps from other companies, Roku is boosting its advertising efforts by creating its own channel called the Roku Channel, which offers content from TV and digital publishers. Some publishers believe the channel will one day be the entryway into the Roku subscriptions in the same way SiriusXM teases new subscribers with their Channel 1 radio. Managing its own content channel makes sense because it gives Roku full control over ad sales, as opposed to getting a cut from the video publishers that stream content on the platform. eMarketer projects Roku’s advertising business will rake in $293 million this year, and is on track to becoming one the biggest players in ad-supported streaming video services.
3. Increasing Ad Tech Transparency
When it comes to demand-side platforms (DSPs) in ad tech, there’s often a sense of mistrust from advertisers because DSP services are typically based on a percentage model – whatever amount advertisers spend on media, DSPs typically take about 15 percent. Mistrust arises when advertisers wonder if the DSP is increasing ad spend because they are truly optimizing a campaign, or because they will get a larger percentage payout from a bigger ad buy. Adelphic, a cross-platform programmatic ad platform owned by Viant, is looking to shift the DSP landscape with the introduction of a subscription model for programmatic ad buying. Instead of taking a percentage cut of the media spend from advertisers, it will charge a flat rate of $3,000 a month regardless of how much the client spends in ads. While the subscription model comes with some fine print (this is the price they charge per seat on the account and there is a minimum of a 12-month commitment) it does reduce the amount of mistrust advertisers may have about DSP firms. Adelphic hopes this pricing model will draw more clients and build long-term trust as focus shifts from percentage payouts to ad performance metrics. Subscription models are characteristic of companies like Salesforce and Adobe, and Adelphic has the potential to shake things up for programmatic by offering increased transparency.
4. Disney+ is a Plus
We now have a timeline for the much-hyped, long-awaited streaming service from Disney – they have officially announced the launch of Disney+ for next year. The service will include a trove of its most loved brands including Disney, Pixar, and Marvel – and you can bet we’ll see even more if they’re successful in acquiring 21st Century Fox (which will also add National Geographic to the list). Disney is also announcing new original programming, including a new “Rogue One”- related series. With the existing content and the various projects in the works, there is a lot Disney will be bringing to compete in the battle for streaming subscription dominance. To make the competition even more confusing, if the Fox deal goes through, Disney will officially own a majority stake in Hulu, which will add to its streaming potential. While Disney+ will still promote family-friendly content and Hulu will remain more for general audiences, there is no knowing how the streaming landscape will shake up with a new player in the arena.
5. Bringing Programmatic Ads into VR
The virtual world within the confines of a VR headset is meant to transport you to new locations that simulate reality and provide an escape. As you walk down the streets of a virtual city (real or imagined) you’ll see commercial buildings, residential apartments, parked cars, store awnings, and of course, out-of-home advertisements (to add to the realism). Until now, the billboards on the sides of virtual buildings, on bus stop stations, on top of taxis are just generic graphics filing the space, but with new advances in technology they may not be generic for long. These virtual billboards are about to become real-life programmatic ads, targeted specifically to the users and continually optimized to garner the maximum amount of engagement within the virtual space. This is the ambition of virtual reality companies Oath and 360i, who recently partnered to promote National Geographic’s docu-drama “Mars” within VR environments. This will make it the first-ever programmatic VR campaign. Users will see the ads posted within the VR world as they would in the real world, and will be designed to be as immersive as the environment around the users. If this works, and as VR programming and adoption increases, programmatic ads within VR may attract more brands to advertise in virtual reality, the same way they do in the real-life. Are we seeing the dawn of a new virtual advertising world? We’ll have to see. A lot more people will need to get goggles before this technology can truly change the game.