As the industry consolidates, it seems we’re getting closer to the day when online video players (OVPs) are combined with ad tech. Ooyala’s acquisition of Videoplaza and Brightcove’s acquisition of Unicorn Media are two notable examples of this trend. In Spain, a company called Smartycontent had that vision early on, and built an integrated suite of technologies from the ground up, with a built-in content syndication platform bolted on. Here Pablo Galiana Ferrándiz, Senior Advisor on Business Development, explains how the platform works, the challenges publishers face in building out video audiences, and the progress of programmatic video advertising in Spain.
Could you explain what SmartyContent do?
SmartyContent is an end-to-end video management solution that aims to make video more scalable and profitable. For the last three years we have been puzzled by what we called the publisher’s dilemma:
If there is strong consumer demand for video, pre-roll CPMs are 5-10 x higher than display and the interest from advertisers is strong, why do publishers with huge audiences account for such a small portion of the video advertising pie?
What we realised is that it was really difficult to make money with online video because to make the model work you need to ensure that you have good content, a proper video content management and distribution technology and finally, a solid monetization strategy in place. Right now, each part of that value chain requires the participation of too many players, all of which want to charge high fixed costs. Additionally, since those assets are not properly connected it requires a lot of special internal support and ad hoc developments. All this complexity is putting off many publishers, big and small, on what it could be a life saver opportunity around video.
So we decided to create from scratch an interconnected full-stack platform that would cover the entire video value chain with three goals in mind: to make it as simple to use as YouTube and to have a strong creative ecosystem within; to enable publishers to syndicate their content within our platform to other publishers, so that rapidly perishable content gets more monetization opportunities without any effort; to make it more customizable and adaptable than other video players on the market, allowing publishers to create from very simple templates their own video sites and mobile video apps; to help publishers monetize as well as they can do with other SSPs, ensuring a layer of great consumer data to qualify audience and full connection to all DSPs and agency trading desks; and, finally, to ensure we move away from the current ecosystem, we only win if the publisher wins. We work on a revenue-share model based on the pre-roll inventory we are able to monetize, so there are no fixed costs attached.
You’ve built a lot of technology there – is it possible to do everything well?
That is a great question. I would say that the key is not doing everything well, but doing the important things well. From that perspective, for us one of the most important thing is ensuring that we are able to connect seamlessly the different parts of the video value chain so that publishers and journalists will love our solution. Right now, our interface is very intuitive and fast to use, it delivers very granular data such as what commercials work better in front of which content and our monetization piece yields above average CPMs.
Our approach is better understood with a great example: Google has approached its suite of products, looking not to have the best email, Google Talk, Google + or Google Docs apps, but rather offering an experience that travels best across devices in a very smooth way. This has taken a great deal of effort, but we believe it was a smart decision to ensure a great experience for journalists and publishers.
A fully connected stack created from scratch reduces the need to have internal support wasting time trying to patch-up the different technologies and produce something that has a solid workflow. Additionally, it allows publishers to optimize campaigns proficiently, getting real time reports with validated data and simplifying invoicing & problem solving. Finally, having an end-to-end solution helps establish a true partnership with smartycontent to increase ad inventory.
And there must be something powerful behind our approach since Ooyala’s acquisition of Videoplaza is supposed to try to achieve that same end-result for publishers. Luckily for us it will probably take quite same time for the newly merged company to come up with something that works as smoothly as our technology does today.
Who are your typical clients?
We have two main segments: publishers of all kinds that want to earn more money with pre-roll and that want a platform that is fully interconnected, easy to use and free of fixed costs. At first they see a clear opportunity to save costs, and then fall in love with the interface and see the great opportunities the platform provides. Then we have ideo Creators and MCNs that are looking for additional ways to monetize video beyond YouTube and other video platforms. For MCNs, this a way to add value to their YouTubers and differentiate themselves from competing MCNs, helping them do a better job than today at retaining their YouTube stars.
We now work with 800 publishers in Spain, among which we find leading pure online publishers such as ElConfidencial.com, Eldiarios. or established publishers like Eleconomista.com and Que.es. We are currently serving 12 million monetizable views through our platform. We are also working with the top MCNs in Spain such as Boomerang or Endemol to help their YouTubers earn extra money through the video sites and mobile apps they have created thanks to smartycontent. The proposal is simple, switch some of your current audience to your fully owned sites, where you will have more flexibility and audience control.
Are you seeing more clients seeking to go it alone instead of going to established video ad platforms? How do they go about building audiences independently?
The answer to this question depends on who your customers are. If we consider our publishers, the reality is that they are realizing that the current model through which they were currently implementing their video strategy is not working and want good solutions. And currently these are not coming from established video ad platforms. If we consider advertisers, some of them like Procter or Reckitt are trying to set-up their video programmatic platforms by themselves, with varied deegres of success. It is not an easy business to be in as it is really fast moving and requires hefty technology investment.
As for the second question, building video audiences independently is not that difficult if you have a faithful followership as many of our publishers have. The key element is having well integrated and relevant content so that consumers feel the added value of watching video in a publisher’s own site.
How is programmatic video advertising progressing in Spain?
Programmatic in video has been seen by many media agencies as a way to change everything so that nothing changes. Thus the focus for the time being has been more on automating video purchases, than in seeking RTB as a key disruptive technology. Therefore, much of the video advertising bought through programmatic focuses on private deals publishers and agencies might have.
We believe that this will slowly change, and are seeing some encouraging signs, like the entrance of the top global platforms into the Spanish market. We welcome disruption and are doing our bit to shake up the Spanish scene.