Outcomes-based buying solutions needed as demand for video increases

Cecilie Moseng
By Cecilie Moseng | 17 June 2020

Cecilie Moseng is account director at Xandr.

COVID-19 has staged new challenges for advertisers. Brands are now increasingly cautious about the sentiment of the content on which their campaigns are placed, and the uncertain economy also means that budgets are tighter. As a result, there is increasing pressure to justify ad spend and show returns on allocated campaigns.

Moreover, the exponential growth of screens and smart devices has placed increased attention and pressure on video advertising to deliver results. In Australia alone, video advertising grew by almost 20% in 2019. Before the effects of COVID-19 measures were felt, online video was already predicted to account for one-quarter of APAC’s entire video market by 2024, almost a 70% increase from 2019.  

Now, as people spend more time at home, the need for on-demand video content has skyrocketed. BVOD viewing has grown by 21% since lockdown, according to ThinkTV, and subscribers to streaming services have all seen impressive increases: Netflix up 25.2% year on year, Stan up 45.2%, YouTube Red up 31.9% and Amazon Prime Video up 116.7%.

New measurement metrics are needed to ensure that programmatic continues to be a useful and effective tool. One solution is to shift the focus to engagement-based metrics like ‘video completion rate’ or ‘cost per completed view’ (CPCV).

Performance-based solutions are essential for marketers and agencies to maximise advertising budgets moving forward as they enable buying on outcomes as a currency. This is especially true for those looking to increase performance and minimise financial risk while improving operational efficiency.

Advanced buying platforms can provide real value here as they develop customised campaigns and optimisation settings to ensure buyers meet their unique KPIs and business goals. We identified early on that measurement in video poses a significant challenge, but by applying predictive machine learning, we have developed ‘Guaranteed Completes’, a solution that automatically optimises bids based on the predicted completion rate of available inventory.

This means that agencies and marketers only pay for impressions that have been played through to 100% completion and the solution can be applied across the entire open internet. This shift in how ROI can and should be measured in today’s world of evolving consumption habits is already showing results. By transitioning from ‘pay per impression’ to ‘pay per completed view’, buyers are enjoying significant reductions in CPCV, as well as improved operational efficiency.

Recently, buyers using Guaranteed Completes in APAC saw more than 90% reduction in CPCV, as compared to using social video platforms. Traders are freed up from the laborious task of manually extracting reports and optimising to completion rate or CPCV-specific metrics, saving up to 20% of their time.

As the pandemic and its ramifications evolve, marketers and agencies have to navigate a new ad tech landscape while also considering intense scrutiny following the ACCC ad tech inquiry. Brands will be looking for more effective and meaningful engagements and results that will lead to a tangible return on investment. When technology is employed judiciously, the ad tech industry can support the changing demands and requirements of brands. The key is to have a data-led, well-executed programmatic strategy and outcomes-led measurement metrics that ensure there is a direct impact on the business’ bottom line.

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