Five Technical Issues Hampering Online Video Growth

Posted on seeking alpha.com:

For many years, the online video industry has always had some who like to point to limitations on the technology as being the excuse and reason why the industry is not grow as fast as some may like. For years it was people complaining that video quality is not good enough, that it's too hard to deliver and too difficult to scale. Today, those arguments are no longer valid. The technology is here today to have great quality video, to deliver it with performance and to reach as big of an audience as today's business models support.

But when it comes to online video advertising, there is a valid argument that the technology today does not have the functionality that is needed for us to see video advertising growth on a faster scale. Will we get there? Yes. But it's taking longer than it should due to these ten technical and industry issues:

There is no set standard for the length of an ad based on the length of the content. We all get ads at 10, 15 and 30 seconds in length for both long and short form content, with each content site doing it differently. And in some cases, like I outlined with Yahoo!, some sites deliver different ad lengths in the same piece of content. What a bad user experience. How can we expect viewers to get use to watching ads when the experience is different on each site?
Many times, ads are delivered at a lower quality and smaller window size than the content itself. This is a trend I am seeing more and more of lately. I click to watch a video that is encoded at 300 or 500Kbps but the ad I get before it is only encoded at 100kbps and the ad only fills up a fraction of the video window. What a poor experience. For instance you are given a 320x240 window but then the ad shows up as 240x180. The only reasoning behind this that I can think of is that it's cheaper to deliver the ads this way since they are at a lower bitrate and/or the agency encoded all of it's ads at only one bitrate. It looks like crap.
There is still very little being done in the way of targeted ads. Due to many technical issues, ads are still being churned out and delivered to web users with almost no insight into what the user wants to see or more importantly what the user should see based on their location. I always use the example of how I see Crispy Creme donut ads yet the closest Crispy Creme to where I live is 43.3 miles away in Milford CT. I know some ad platforms are doing more and more with targeting, but still not enough. This needs to be figured out faster. If you can't deliver ads based on a persons interests, geographic location or even gender, then the majority of these video ads are completely being wasted. It's no wonder the pre-roll ad format is dying.
Reporting metrics. Where are they? It seems that every ad network I talk to all measures and records user metrics for ads very differently. What is the problem here? Not being able to give advertisers back the reporting they want, thereby enabling them to try and come up with their own metrics to judge if their campaign was a success or not is like shooting the industry in the foot. No service, product or offering is worth anything if you can't give the person who is paying for it the data they need to analyze if they should keep paying for it. The ad vendors make this WAY too difficult. For instance, if you look at the top six to eight vendors websites who provide these services, why can't you download a product sheet from their website that shows exactly what type of reporting is offered? Why are they hiding this info and keeping it mysterious?
CPM rates. Ok so this one is not a technical issue but it is one of the biggest problems in the industry. Why is it that no one is willing to say what they get per CPM for online video ads? I ask content owners all the time, I ask the portals, I ask the major networks and to date, I don't know of a single specific example I could tell someone of what the rate is. I could not point you to one major content owner and say I know what price they are getting for CPMs rates and no one shares this info. Yes, everyone says it's between $10 and $60 and that's completely useless. All of the major studios keep telling us how well they are doing online with their content and how well the advertisers love to sponsor it and how much growth they are seeing yet, none of them will give any numbers, to anything. Short-sided thinking folks. You know how many content owners actually have good content worth syndication or licensing but don't as they have no idea what type of rates they can get? There is such a lack of information in the market for CPM rates and no one is doing any educating of the market. It's a losing proposition for everyone when this information is hidden away as if it's some sort of patented trade secret. They always have excuses like the one where the major broadcasters say advertisers are buying ads across many different platforms and they can't break out the P&L from just one platform like the web. What crap.
I'm certainly not the first person to point out some of the technical problems the online video advertising industry is facing and I won't be the last. We all see the potential that online video advertising holds and see the many ways that content owners and portals are embracing all forms of online video ads for pre-roll, post-roll, in page, in stream etc.

Part of the problem is the industry itself but a good deal of the problem lies with the technology of the entire ecosystem for video ad creating, selling, fulfillment, delivery and tracking. I'm as big a fan as anyone when it comes to ways that content can be monetized, but the industry as a whole needs to do a lot better job of working together to create as much in the way of standards as they can.