Lack of premium inventory, whatever that may be, holding back digital video monetisation

DetailsEditor | 11 June 2015

Digital video advertising represents a golden opportunity for advertisers, agencies and media companies says Forrester Consulting, but it warns that a number of key challenges persist before the market can be exploited fully.

These are the stand out findings of research the analyst begun in January 2015, setting out to evaluate how advertisers, agencies and publishers in Argentina, France, Germany, Italy, Mexico, Spain, the UK and the US are adapting to new trends in video advertising. Forrester developed a hypothesis that tested the assertion that advertisers, agencies and media companies are seeking alternative approaches to traditional digital video advertising because of the challenges associated with limited video inventory.

The research found that even though both buy- and sell-side companies are bullish on digital video advertising's future. All market participants expect digital video spend to increase in the next two years, with companies seeing video ads as representing an opportunity for advertisers to reach customers with rich, engaging messages about their brands and products. However, Forrester also found that challenges are holding advertisers and media companies back from fully pursuing digital video advertising solutions. These challenges include defining premium video inventory, dealing with the availability and lack of premium inventory, and assuring digital video advertising performance.

Beyond simply wanting more premium inventory, advertisers and agencies indicated that they want better targeting and measurement of their video ads' impact. By contrast, media companies were seen as struggling with the costs of video content and the ability of their sales force to sell it effectively.

In a call to action, Forrester urged advertisers, agencies, and media companies to build an accountable, transparent video ad market, noting that as an emerging ad format, online video lacks the foundation of agreed-upon standards and practices other media enjoy. It predicts that media companies that can deliver high quality real estate, backed by assurances on performance, will be poised to deliver truly premium video ad inventory that will provide the confidence buyers are seeking.

Ultimately, the analyst stated that those who will benefit from more effective campaigns will be buyers who will then expand their definition beyond known and trusted media brands and embrace media companies that offer transparent and accountable measurement.