Online video advertising: Experts debate the speed of Asia's TV-to-online transition

While TV is still a healthy medium, advertising dollars are gradually shifting to the digital space. Australia has led the way across the region over the past 12 months, with around 10 per cent of digital advertising dollars going to video, while Southeast Asia and New Zealand are accelerating, according to the data from VeNA (Video & Entertainment Network Asia).

“Marketers are using digital-video advertising to complement their TV advertising campaigns, as online offers the ability to provide brands both a measurable and engaged audience, along with a measurable ROI with hard numbers,” said Matt Von der Muhll, director of media partnerships, Asia Pacific, for SpotXchange.

Advertisers that had previously allocated spend toward alternative brand products, such as ad networks, are recognising that digital video is a very powerful medium for relaying a brand’s message at greater reach and scale, he said.

“In the APAC region, there are several players in video space aggressively pitching to win business from Singapore, Hong Kong, etc,” said Indy Khabra, head of display advertising for Adlux. "There is definitely an opportunity to get video budget, such as pre-roll, as well as in-banner video."

One of the most important drivers pushing this process is growth in the availability of video content. “The biggest issue to access this content has been technology,” said James Zipeure, chief operating officer at VeNA. “But video is now so much more accessible, and telcos will decrease barriers to entry through cheaper pre-paid services and upcoming smartphones with faster download times.” 

There's also a ready source of creative, according to Von der Muhll. “By repurposing existing TV creative to digital video, this content is readily available and doesn’t consume additional resources," he said. "By extending existing TV campaigns to an online environment, brands are able to better engage with their audience and increase brand presence across multiple platforms.”

Another major driver is growing maturity and understanding of programmatic buying. "Both publishers and advertisers are realising the growing value of programmatic buying and where it fits in their campaigns,” he said.

While consumers’ increasing appetite for quality content is driving the move towards digital video, the change also places pressure on advertisers.

“This is still a new medium, and consumers are expecting broadcast-style quality 100 per cent of the time,” Zipeure said. “Like any new communications channel, it will take time for video to find its feet. But as seen in other countries, it will become a key component in the marketing mix.”

Education about measurement is another key challenge.

“There is the lack of understanding regarding the difference between brand and performance metrics with digital campaigns, regardless of whether the campaign is rolled out on video, online display or direct response,” Von der Muhll said. “Many advertisers don’t realise that TV dollars are not equivalent to the amount of available inventory with digital video.”

“It’s an education piece for agencies and their clients," echoed Khabra. "The better technology and results they get, the more compelling the argument is to shift TV budget into online video advertising. Advertisers are trying to convince decision makers who are traditional marketers to invest in video. This comes down to measuring results. So data is very crucial.”

However, with RTB helping to optimise online video advertising, online video is definitely the biggest growth medium over the next few years. According to VeNA, the growth of online video advertising for 2013 will be above 50 per cent compared with 2012 figures, with a projected compound annual growth rate of 39 per cent over the next four years.

RTB is still in its infancy in the Asia-Pacific region, and much of the action has been in the display market thus far, but the amount of available RTB video inventory is growing.

“RTB will grow gradually in all markets in 2013, but is still very small," Zipeure said. "We would expect around 10 per cent of the market will move to banner RTB and 2 per cent to video. There is a finite amount of inventory available to deliver volume, with only a few players who can access this.”

Larger markets like China and Japan will be the primary focus, because RTB technology provides greater efficiencies at scale, Zipeure added. “That said, there needs to be a distinction between pure RTB technology (efficiency or price), and technology that enables strong strategic effective output,” he said.

Khabra said players such as TubeMogul have forced networks like Adconion to lift their game in terms of transparency and reporting, but the focus should be placed on “relevant details, more dynamic and customisable DSPs, and enhanced technology around visibility”.

“A lot of agencies are setting up their DSP/trading desks, and calling on their search specialists to manage online RTB for video,” he added.

Von der Muhll also suggested that the Asian market could look to experiences in the Australian market for insights into what would come next.

“The region is starting to make the most of increasing education around RTB and the technology platforms available to them,” he said. “The size of the audience and scale potential in Asia is getting advertisers very excited as they realise having the ability to control spend in a real-time environment will inevitably attract increased budgets and help with cost efficiencies.”