The Online Video Advertising Market Is Severely Broken, And It’s Only Getting Worse

As a consumer, I want a good user experience when I watch video no matter the platform or device I am using. It’s what all consumers want and something the online video industry has been promising for years. But when it comes to content that is supported by advertising, the market is completely broken, providing a crappy user experience. And it’s been this way for years, with no signs of getting better. In fact, it’s getting worse, much worse.

Because there are almost no standards in the online video advertising market, it makes for a very poor user experience. Every website seems to treat video advertising differently, be it the format, length, quality or functionality of the ad. Vendors that publishers use to deliver and track these ads promise things like targeting, and high-quality engagement, but they fall severely short. It’s the whole reason why the average CPM for non-targeted pre-roll videos has fallen over the years, and now hovers around $10. No advertiser wants to spend a lot of money, except in specific niche cases, because the targeting of the ad, the experience for the consumer and the metrics given back to the advertisers are so poor. Yes, there are some online sites that can charge $25 CPM for pre-roll and get it, but not many.

Day after day, site after site, I get the same pre-roll ad delivered to me ten times in a row. On sites like CNN, ESPN, NFL, etc. many times I get the exact same ad each time, all on different video clips. So either there is a lack of inventory by the publisher, which you then have to question why from a business standpoint, or the technology can’t tell it’s repeating the ad, which I know isn’t the problem. On some sites, the content I want to watch is available in HD quality, but the pre-roll ad is delivered in SD quality. Some websites will deliver a 4:3 ad inside a 16:9 player. One site will run a 30 second pre-roll ad before a video clip that is only 30 seconds in length, but another will stick to only 15 second pre-roll ads for content that is short-form.

Some versions of pre-roll ads will let you skip them, others won’t. And when it comes to the player itself, some ads you can make full-screen, others you can’t. Some you can pause and others don’t let you pause the ad at all. And then you have the problem on some sites that auto-play videos, that start with an ad, which don’t even let you turn them off. I will read an article on a website only to later notice that a video was playing someplace else on the page the whole time, and yet I didn’t see the ad or engage with the video at all. But an advertiser just paid to deliver that ad anyway. Last year, Google said that 46% of the video ads running across the desktop and mobile web (outside of YouTube) never had a chance to be seen. All online video advertising vendors talk about is engagement, and yet the metrics they all use to measure engagement are different or there is no real engagement taking place at all.

And for live streaming, it’s even worse. Server side ad insertion is very hard to do, many vendor solutions in the market do not work, and the consumer experience is poor. If I want to watch a live stream of an event that has already started, I want to get to the stream as quickly as possible because I feel like I am missing out. And yet as an example, for the DCN convention stream on FOXNews.com last week, I had to sit through the page loading, (6 seconds), the player loading the ad, (5 seconds) then the ad itself, (30 seconds), and then the live stream buffering (5 seconds). So 46 seconds after clicking the live stream link, I’m finally getting the content. What is it about that experience that publishers and video advertising vendors think is good?

Nine years ago I wrote a blog post entitled “The Five Biggest Technical Issues Hurting The Growth Of Online Video Advertising” and sadly, almost a decade later, the industry is struggling with the same issues. Nothing has truly changed. Seven years ago I was commenting that there is a shortage of online video advertising inventory, and that’s still a problem today. And the reason for all of this, the dirty little secret so to speak that no one wants to address, is that the cost of dealing with the ad network and technology is in most cases, larger than the revenue from the advertising. At a $10 average CPM, there isn’t a lot of revenue to split up amongst everyone that has to get a piece of the pie. Sure, a site like Hulu can do well with video advertising because of the content they have, but very few sites have content as valuable as Hulu. So you can get high CPMs in the $20-$25 range, but that’s only for high-quality video offerings, which isn’t vast majority of videos on the web.

Demographics is key with advertising, we all know that, and yet almost no targeting is taking place at all when it comes to online video advertising. I get ads for physical stores that aren’t within a hundred miles of where I live. I get ads for senior citizens, which isn’t me. Ads for kids products, which I don’t have. And now I know why so many ads start off with questions like, “are you…”, “do you…” etc. because they don’t know whom that ad is reaching. So not only is there a whole host of technical problems when it comes online video advertising that is preventing the medium from being truly successful, but we also have quite a few business problems as well. Hence why the usage of ad blocking software by consumers continues to climb.

Some will argue by telling me how big the online video advertising market is, but that doesn’t mean the consumer experience is a good one. It’s been a bad experience for the past ten years, and so far, I see nothing on the horizon that gives us any indication it’s going to get better. We’ve seen a lot of promises made, but very little in the way of actual advancement. So we all better get used to seeing the same non-targeted ad, over and over again, because they aren’t going to be going away anytime soon.

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Thursday Webinar: SVOD User Behaviors & Perceptions, Data From IBM Cloud Video Survey

Thursday at 2pm ET, I’ll be moderating a StreamingMedia.com webinar on the topic of “SVOD User Behaviors and Perceptions“. Two-thirds of subscribers abandon stream sessions because of buffering frustrations. Nearly one in five has canceled an SVOD subscription because of quality issues. And most people now watch over connected TV sets, not laptops or tablets. Those are just some of the findings from a new survey conducted by IBM Cloud Video.

Join us for a webinar to discuss SVOD user behaviors and perceptions to ensure that your SVOD platform is optimized for the expectations, behaviors and attitudes driving a vital new category in the premium video industry. You’ll discover how millennials think about SVOD differently from other demographic groups, how prevalent password-sharing is, how churn rates differ between SVOD and pay TV services, and much more.

Don’t conceive, launch, tweak or modify your SVOD offering without understanding the key drivers of the video economy. Register today, and arm your SVOD business initiative with the critical intelligence you need to succeed.

NYC Meetup Tonight! Cold Beer, Arcade Games & Networking

BarcadeNewYork_header2015-2I will be hosting another meetup of streaming media professionals in NYC tonight, starting at 6pm at www.barcadenewyork.com – 148 West 24th Street between 6th/7th. Come escape the heat for a cold drink ?, network with fellow peers, and play some video games ?, thanks to sponsors JNK Securities, Hola CDN, Elemental Technologies, and Imagen. Open bar for as long as it lasts!

The place has over 50 old school video games, (see list) 25 beers on tap (see list) and some great food. Highest score on Ms. Pac-Man will win an Amazon Fire TV!

There is no RSVP needed or list at the door. Just show up with a business card and you are in! You will need a wristband to drink, so introduce yourself to me when you show up.

I’ll keep organizing these every month so if you want to be notified via email when the next one is taking place, send me an email and I’ll add you to the list.

We Need Synced Live Streaming: It Enables A Better Experience And More User Engagement

logo-net-insight thumbnailIt’s amazing how many live sporting events are now broadcast online every day and I recently made a list I shared on Twitter. However the downside to many live events is the long delays that can vary from tens of seconds to minutes, which at times, can ruin the experience and hamper the social and interactive experiences that many live events now contain. I’m a Mets fan and stream games online and can’t be on social media at the same time as big plays are routinely shared on social platforms, before I see it take place via the live stream. You almost can’t communicate with the outside world during a game if you are following the game via you phone or smart TV app.

As an industry, we keep focusing on the word “quality” to describe the clarity of the stream, but we should also realize that many factors impact the quality of the overall “experience”. I want good quality video, but that’s not the only way to determine the QoE. And as live events become more important on the web, and especially for sports, syncing streams across devices is going to become a requirement, not a nice-to-have. Recently I got to test a new solution from Net Insight called Sye, which targets these problems. The solution allows live content to be streamed with frame-accurate synchronization across any type of screen be it mobile, desktop or to the TV. The delays were at the same level or even faster than for regular TV, which opens up a new type of seamless viewing using both regular TV and your favorite mobile device. But it’s not just live sports this can be applied it. Any other live show where you want to enhance the social interaction can benefit with such a solution.

The Net Insight solution also synchronizes OTT with broadcast TV and it made me think of the applications this could be applied to. Television audiences viewing the same content at the same time opens up an array of new and exciting possibilities for broadcasters, content owners and service providers. They can produce different types of content for primary screens compared to that created for companion apps or smart apps, depending on the application. For example, events like the Olympics or car racing could take advantage of such a solution as the synchronization would allow viewers to watch related content, such as a driver cam, on their second screen while at the same time watching the full action unfold on their primary screen in parallel, and all in perfect sync. This not only extends user experiences but also allows media operators to engage with audiences in unique ways and improve the user experience. It adds more value to the live event and provides new opportunities to monetize content more effectively. Tata Communications is now the first CDN to enable Net Insight’s solution across their network, allowing content owners to take advantage of it for live streaming.

Think of the new business and advertising models that could be created based on more than one screen being used, with the content being synced. It’s compelling, which is what “live” is supposed to be all about. As an industry, we keep talking about live events, but very little has been done to really take live streaming to the next level. Yes, bitrates keep going up, startup times are going down, but not much else has been done. We need to think about how we open up new opportunities for content owners and what the future looks like for live experiences on the web. So I am always looking at new solutions in the market, ways data can get overlaid, how second screen content can be added and I think what Net Insight’s solution offers to the market is very unique. I haven’t seen anyone else offering this or thinking about ways of changing the experience for users when it comes to live streaming on the web. Net Insight has customers using the solution today for live OTT applications and says they will be able to share some of those case studies soon.

NYC DASH Workshop, Aug 22nd: Comcast, MLBAM, Akamai, Adobe & More

dashif-logo-283x100_newThe DASH Industry Forum in conjunction with Comcast is organizing a free workshop on MPEG-DASH taking place Monday, August 22nd at 30 Rockerfeller Plaza in New York City. There will be presenters from Adobe, Akamai, Brightcove, Comcast, Microsoft, Major League Baseball, JW Player, Qualcomm and INISOFT. You can see the full program schedule here. Attendance is limited and is by registration-only at the following link: https://www.eventbrite.com/e/dash-workshop-tickets-25962250791

New Security-as-a-Service Company StackPath Launches, Acquires Four Companies, Raises $150M

stackpath-logo-s-cyanThis morning, the founder and former chairman and CEO of SoftLayer Technologies, which was acquired by IBM in 2013 and is now the foundation of IBM’s Cloud Computing division, launched a new Security-as-a-Service company called StackPath. In addition to the company coming out of stealth mode, StackPath has also acquired four companies in the market including MaxCDN, a leading CDN company, Fireblade, an Israel-based company with patented cloud based WAF technology, Cloak, a leading VPN technology company and Staminus, one of the leading anti-DDoS providers. StackPath has raised over $150M from ABRY Partners, a $4.3 billion private equity fund focused on investing in information and business service companies.

StackPath says their platform uses a “machine learning engine that becomes smarter and more threat-aware with each recorded event”. It effectively deputizes each service on the host network with the authority to identify and communicate real-time threats against it to an intelligent data repository, which is actionable not only for StackPath subscribers, but also via an API for application developers, microservices, connected devices and the global Internet of Things.

Unlike most security solutions today that are bolted on as a feature to upsell, like Akamai’s, all of StackPath’s products will have security built-in. Services like secure content delivery will include DDoS mitigation and Web Application Firewall (WAF) in every plan. As StackPath launches, it already counts more than 30,000 customers ranging from Fortune 100 companies to early-stage startups, across all of the companies they acquired. StackPath is coming to market with Secure Content Delivery first, and will be launching several more services over the coming months including; Monitoring, Logging, Storage, Compute, Video streaming, DNS and many other business services. StackPath was the first company they acquired and has already added a lot of capacity and features to the network in the past 90 days. MaxCDN was originally deployed in 13 POPs and since the acquisition, has expanded their network to 25 POPs globally and refreshed all of the hardware.

In a conversation last week with StackPath’s CEO Lance Crosby, he pointed out that unlike legacy players’ expensive managed services model for security, StackPath will be highly competitive with pricing across the board. From hourly to monthly plans StackPath will be the first to market with consumptive based security services and APIs. StackPath has already signed up IBM and CenturyLink as white-label channel partners, which gives them access to banking, retail and healthcare customers via IBM and smaller telcos via CenturyLink. The company also says they have an impressive array of IP with patented WAF and DDoS mitigation technology. (I’ll add to the post any further details I get on patent numbers.)

I’ve been tracking security solutions a lot more lately and I like what StackPath is building. StackPath has designed their service to be able to deploy on top of Amazon, Google, Azure etc. and the goal is to simplify security so that companies can use the same security policy across multiple cloud providers, either via their own private cloud or public ones. I’ll have more details on StackPath’s technology in a follow up post.

If You Don’t Have Pay TV, NBC Will Only Let You Watch 30 Minutes Of Summer Olympics Online

Screen Shot 2016-07-18 at 1.47.03 PMLast week NBC shared some details around their plans for streaming the Summer Olympics and while they are quick to highlight that NBCOlympics.com and their NBC Sports App will stream 4,500 hours via TV Everywhere, you have to be a subscriber to pay TV to be able to see it. Users who can’t authenticate via a cable subscription will only be able to stream 30 minutes of coverage prior to authentication on their first visit, and 5 minutes each subsequent day. I guess we shouldn’t be surprised by the fact that the Olympics content is restricted to pay TV subs, but it would be nice if NBC allowed viewers to see more than just 30 minutes without needing to be a cable subscriber.

This year, NBC is using the newly launched technology service from NBC Sports called Playmaker Media to manage the Olympics workflow and they have pulled in partners Adobe, Akamai, Microsoft, iStreamPlanet, and Comcast Wholesale to make it all work. Every year we have an Olympics many in the streaming industry want to highlight how big of a deal the Olympics are for the technology space, but we have to keep things in perspective. It is a good way to show off the technology and what can be accomplished with video, it’s not a big revenue driver for the companies involved. For all of the content delivery Akamai will be doing for the event, the company is only expected to generate around $5M from the Olympics.

And the traffic to the event is never as big as some predict it will be. The 2014 Winter Olympics peaked at just under one million simultaneous users, which isn’t very big at all. I don’t expect we will see a huge traffic increase this year, even with all the additional devices and platforms NBC is making the content available on. The next World Cup will easily surpass the Olympics in terms of the number of simultaneous streams that are concurrent at any given time. But from a feature standpoint, the Olympics do get better each year and I’m glad to see that NBC is adding support for connected TVs and closed captioning in English.

What I care about most with large-scale live events like the Olympics, and what the industry is just starting to focus on, is measuring the quality of experience (QoE). Number of streams delivered is just one metric that should be used to determine the success of any event, but it should not be the only metric. I’m hoping that this year, NBC will share out QoE data on how the stream was delivered and what kind of user experience the viewer had so we can truly judge the success of the event. While it’s great that guys like Sandvine, Cedexis and others provide us with details on the infrastructure side of things, no data from any of these kind of large events is ever shared that shows how the stream really did, down to a user level. Having high-level data that shows a cloud provider or ISP had a problem is nice to know, but it doesn’t tell us what the problem was or the true impact to the viewer. So hopefully NBC can set the trend for the rest of the industry this year by putting out real QoE data during the Olympics, or give their partner Akamai the permission to do so.