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$10B of advertising revenues on AVOD are wasted every year, according to Watching That

CEO of Watching That, Cameron Church, estimates that $10B in advertising revenues are lost every year in programmatic advertising on AVOD services. According to Watching That’s own data, the fill rate of ad space sold programmatically on AVOD services is approximately only 85%.

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Programmatic advertising originally emerged as an automated solution for efficiently trading ad space and facilitating targeting; but sophistication and complexity also brings its own set of problems. Data gathered through Watching That – a revenue intelligence platform for OTT – shows that the fill rate of ad space sold programmatically on AVOD services is approximately only 85%. This leaves a significant portion of advertising inventory unsold due to creative or other programmatic fulfilment issues. He said: “The global OTT video advertising revenue figure for 2021 is $89.4B, with 14% annual growth. From that, we think there is a $10B opportunity through solving technical and operational complexities [associated with programmatic].”

Cameron emphasised that the increased complexity of ad trading with programmatic means that it is more difficult to locate and quickly fix loading problems in real-time, if media sellers lack a holistic view of the functioning of the entire ad supply chain (the ad server, play-out app, SSAI vendor etc.). He explained “[With the rise of programmatic] you go from a party of one-to-one to a many-to-many relationship. If they’re all sitting there seeing it from their own local perspectives, no one has the global view.”

“The ad server can only know what it sees – and that can be the inbound request and its decisioning back out – but then they hand off to the SSAI vendor, who then goes through another process of fulfilling and stitching, and from there it doesn’t necessarily hand-off to its own application, but a partner application which it doesn’t control.” The increased number of hand-offs associated with this many-to-many model of trading ad space, combined with the 24/7 “in real-time” nature of programmatic trading, renders traditional error reporting ineffective at stopping problems from reoccurring, Church argues, and action to address fulfilment issues typically lags 24 hours after the error has occurred.

Analogising the Watching That platform with an orchestra conductor, Church explains that the service seeks to remedy these programmatic issues by synthesising information from all data points across the tech stack, to provide media sellers with a unified view of the end-to-end process. He emphasises that the service not only provides reporting and insight to clients, but also allows companies to manipulate advertising in stream, by providing automated alerts, troubleshooting, optimisation and forecasting services – all of which, Church believes, are indispensable to media sellers for maximising their advertising revenues.

He believes that a significant benefit for publishers working with Watching That is access to their expertise with regards to video advertising. “We pride ourselves on our human element, and our ability to offer ‘white glove’ service. In this market, where the labour market is already heavily constricted, there is no school where you can go to learn video advertising.”

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