Ed Haslam is Senior Vice President, Marketing, at YuMe, one of the world’s largest video ad networks. At CES, YuME announced their partnership with Samsung on their connected TV inventory, which follows previous deals with LG and Roku. Prior to joining YuMe, Ed was co-founder & VP Marketing of Ludic Labs (Groupon), which developed both the social media community Diddit.com and local commerce service OfferFoundry.com. Before Ludic Labs, he served as the founding marketing executive for several other venture-backed technology companies including Orbital Data (Citrix) and Inktomi Corporation (Yahoo!). In the first part of a two-part interview, Ed talks about YuMe’s experience with connected TV and about the types of metrics and creative formats being used. Part 2 will be published tomorrow.
For those who don’t know, what does YuMe do?
We’re a video advertising technology company, so we offer SaaS services to publishers and advertisers, AFP and AFA. We also use those same solutions to run our own video ad network. So we are in a sense two businesses, although most of our revenue comes from the ad network side of the business. If I was to compare our business model to another company’s, I’d say we’re a bit like Google, who is a technology search engine who then makes all their money revenue media based on that engine.
How has connected TV inventory been performing?
When an advertiser comes to us they usually have an audience in mind and they’re often interested in spending 10 or 15% on connected TV and it doesn’t matter to a huge extent to whether it’s on a Samsung, an LG or on Roku. The advertiser is most concerned about reaching the right audience in the right context.
Early on, connected TV won’t be able to scale to meet the needs of a national brand campaign. At the moment it’s the new mobile; it’s the new experiment; it’s the new shiny object people are playing with.
Some brands are running those campaigns standalone, so they’re saying I’m just going to run a campaign to learn about this new platform. Other brands are more open to just saying if we can spend 80% on online, 15% on mobile and 5% on connected TV, I’ll move all my budget over and we can run campaigns across all of those screens. In which case connected TV is an extension of an overall video campaign. We’re seeing both.
How have YuMe been measuring the performance of connected TV advertising?
Our primary measurement is completed views. Some people want to see clicks, but we’re mainly doing brand campaigns so CTRs are interesting as indicators, but most advertisers focus mainly on the completed view. Some of the new engagement metrics are also starting to come up, so an advertiser might view an engagement as dwell time of the mouse greater than a certain amount of time, plus at least an 80% completion rate for example, which might be viewed as an engagement. Or did the user engage my clicking on something in the ad unit while the ad kept playing.
These engagement metrics could still be characterised as experimental right now – people are just playing with them to see if they work and if they work economically. Because in the end, what they need to measure are the brand metrics around purchase intent, brand recall and message recall. Those things have a latency to them post-campaign that need to be measured in months. So it takes a little longer to work out what’s working for the brand, and how effectively.
Have advertisers been using TV creatives or are they creating content specifically for video?
We have a creative team that takes their TV assets and we repurpose them for video. So we have Flash and HTML5 programmers, depending on the platform, and we take an existing, highly valuable, expensive TV marketing message and convert it into an interactive ad. And then interactivity will be different on each platform.
So with online, it’s usually to a landing page, or to a microsite, or perhaps to achieve some sort of social media objectives. It could also be a microsite that expands from within the ad, so you have all the interactivity within the player. On mobile, the interactivity often has something to do with the touch screen capability and moving things around on the screen.
And in connected TV it’s still early days – if you look at things like the Magic Motion Remote from LG, there’s some really interesting things an ad or app developer can do, just like the early app developers on mobile took advantage of the accelerometers and touchscreen capabilities – I think the same thing will happen on TV. Right now, it’s still very early so most of the inventory is for banners or ‘click the video’, or people are building branding apps.
With so much new inventory coming online via connected TVs, are we at risk of reaching a stage where we suffer from an over-supply of inventory in the market?
No, I think this is the opportunity we’ve all been waiting for in terms of seeing portions of TV budgets starting to move online. If you look at the global TV ad spend of roughly $160 to $180 billion versus the roughly $80 billion spend that exists in digital today. A lot of people claim a lot of that TV spend hasn’t moved over because you can’t get the reach and scale with video that you can get with TV. And so I think once more of this inventory will open up once there are good systems in place for frequency capping to prevent users from seeing the same ad over and over again. I think the new ecosystem is going to drive new technology solutions to help people use what is currently diverse and very fractured inventory.