I recently explained why the IAB’s new video ad serving standard (“VAST” for short) will have a huge impact on the online video ad market by breaking down format barriers. Online video advertising competition is increasing rapidly as the most sophisticated display ad networks ramp up video efforts aggressively. That article generated energetic discussion, with virtually everyone, even incumbent video ad networks, agreeing with the fundamental thesis of convergence.
As it happens, I wrote that piece on the way to CES. Right after my co-founder, Elizabeth’s panel discussion we were approached by the CEO of a Digital Out Of Home (DOOH) network. His question: is Brand.net buying DOOH inventory? Our answer to him: it’s lack of standards, not lack of business potential, which prevents us from seriously considering it. Our next thought: it’s time to write about a topic we discuss frequently with our investors and industry analysts: accelerating online media format standardization and accelerating media convergence (the ever-blurring line between what is “online” and what is “offline”) are working together to create a financial opportunity in the online display market that is even bigger and growing even faster than they think.
While online media advances rapidly, hardware, telecom and content providers are moving just as aggressively in “IP enabling” TVs and other consumer electronics devices to take advantage of new technical possibilities and to accommodate quickly evolving user habits. This isn’t just the usual future-state pronouncements from technology titans like Microsoft. For example, mass-market consumer retailers are changing up their offerings quickly too. Consider Best Buy’s recent announcement that all web-connected TVs it sells will come with a subscription to a Best Buy library of content.
So when you’re sitting on your couch, looking at your 50” flat screen TV on the wall, watching a show that is streaming from Best Buy through your internet connection and you see an ad, does the “offline advertising” cash register ring somewhere or the “online advertising” one?
The (literally) 11-figure question is: will the bigger catalyst for “driving TV budgets online” be (a) online ad technology / format innovation or (b) consumer device evolution and usage blurring to the point where “online content” becomes impossible to distinguish from “offline content”. You guessed it – we vote (b).
Of course it doesn’t stop at just TV and Online Video. All digital media comes together.
I started this piece with a DOOH executive asking us about partnership opportunities. Many DOOH devices are already IP-enabled and that percentage is growing rapidly. Network owners should follow the IAB’s lead, standardize DOOH ad units and serving protocols and watch the money flow!
And how long will mobile remain a hodgepodge of complex and proprietary advertising standards? Not long. Apple (true to form) blazes the trail to the future here: when you’re browsing the web on your iPhone, where do you think the display ads you see are being served from? Answer: in most cases, the exact same systems that serve them when you’re browsing on your PC. Sure there are some issues with Flash compatibility, but the direction is clear; format barriers are falling.
Surprised? You shouldn’t be. Mobile offers powerful capabilities for hyper-local, hyper-timely offers, but geographic and temporal targeting are not new concepts in online advertising (or in “offline” advertising for that matter). Why should we need a whole separate “stack” just to deliver an ad to a different device? The new iPad makes the distinction between “mobile device” and “computer” melt away even further. The Apple example will evolve rapidly from exception to rule, particularly as more encouraging performance data emerges.
So as with video serving standards, the question of the digital marketplace coming together isn’t “if” but “when”. More and more devices will become IP-enabled with increasing degrees of standardization to take advantage of the financial opportunity. Online advertising will grow bigger and faster as advertisers can more seamlessly trade off serving offers against the right consumer on the right device, managing cross-channel campaigns in an ever more integrated way. The definition of “Online Display” will broaden dramatically, essentially encompassing all graphical advertising regardless of format, size or screen/device.
We’d love to hear your thoughts on which capabilities will be most valuable in this fast-approaching merged media world, and who in the current crop of advertising players possesses them. I look forward to sharing your thoughts, and my own, in an upcoming piece.
As I have mentioned previously, the next 12-36 months will be exciting indeed.
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