Recent big name acquisitions will bring chaos before order to the online video industry. Broadband Enterprises' COO explains.
By most practical measures, the recent acquisitions of DoubleClick and Atlas by new media's old titans would suggest that order is about to be systematically injected into the budding online video industry. Of course, this would also suggest that the digital medium and its dependents are governed in some way by practical thinking.
Reality suggests something different. Before we let this notion of consolidation being a good thing get the better of our collective judgment, let's consider that these were reactive moves, that Google and Microsoft were racing against each other to buy the widest possible constellation, and that neither is sure how it will future-fit its new product to service the foot traffic that matters most.
In many cases, online video is its own worst enemy. The ease and virtual scale of internet technologies level the virtual playing field. The financial efficiencies of creating original online video programming widen the talent pool. Its rapid growth creates irrational -- or impractical -- behavior. Like trying to cloth a puberty-busting teen, the digital medium can only dare try to keep up with the sheer size of video. It's big, and the big guys make it bigger.
But video is still so new and barely charted that the industry hasn't yet had the chance to create any material standards. Ad-serving being one of the many areas in need of a genuine hose down, none of the vendors in the video space has been accredited by Media Ratings Council. And virtually every site in the land has a separate and distinct counting and performance methodology.
DoubleClick's DART platform is pervasive at the publisher level. And while many of those sites already work with Google on the display side, there are many who weren't using AdSense as a result of sheer distaste for Google. But what will those same sites do when their DoubleClick contracts expire? Even if Atlas fast-tracks its publisher-facing product, it, as a Microsoft-owned outfit, is likely to face the same challenges as DoubleClick. This could open the commune to a new player or two. And while those companies haven't yet fully materialized, if and when it happens, it merely adds more voices to an already crowded standards-bearing discussion.
There's also the question of conflict. Despite their enormous size, Google and Microsoft are online video publishers, with one more advanced than the other. How does their standing as an agency-facing vendor distort or conflict with this? Even if publishers remain reluctant to allow a third party to serve video ads into their streams and this remains largely a reporting-specific initiative, at the bare minimum the Googles and Microsofts of the world will be asking their competitors to accept their pixels for tracking purposes, and -- here's the rub -- their numbers for billing purposes.
Atlas and DoubleClick both have their agendas. Both play a part in the IAB committees responsible for helping draw up a video standardization map. Both come at this from differing positions, positions that benefit their infrastructure, methodology and existing contracts. The Google and Microsoft acquisitions, when completed, will raise the stakes between the giants; not necessarily foster a cooperative spirit.
There are a throng of agencies whose detest for Google and its direct-to-advertiser model is no secret. Those same agencies are tasked with making recommendations on the ad-serving side. Do Atlas and Microsoft win by default or is there an inherent need for parity across the board?
Then there is the question of video format. Microsoft's WMV is not universally accepted, like the more flexible FLV. We all know that autonomous rule is no guarantee, which begs the question: Will Atlas aid Redmond in its hope of dethroning Adobe with Microsoft's Silverlight, which is said to promise both the ease of integration and user experience that Adobe's Flash player does?
Everyday questions such as these -- no doubt largely overlooked during the acquisitions -- will actually take time to answer and, ultimately, put us on a slow track toward standardization.
Microsoft may not be long for the agency world, but as long as it owns an agency (Avenue A) whose principal objective is to win buying, planning and creative business from major advertisers, it will be faced with questions of antitrust. This says nothing about the trove of sensitive information from all parties within the industry to which both Google and Microsoft have access.
Microsoft is also a major online advertiser, spending millions of dollars each year across a variety of brands and an assortment of asset types. There is more than subtle curiosity over how the Atlas purchase impacts the thinking within Microsoft's current agency, which is a DoubleClick shop. Is the agency forced to go with Atlas? And because Microsoft is as big an account that any agency could have, does the agency of record fall on the sword and move other accounts to Atlas when the current deals expire?
These aren't the only issues. The industry is dealing with challenges in planning, creative, rights clearance, deciphering the numerous technologies available to improve the experience for users, and, yes, an overall understanding of online video and what it means to media and marketing. Despite the numbers growth, these issues are impacting budgets. And these issues are only some of the challenges the industry contends with before an agency issues an order. Once a campaign is in place, the trials become more operational but no less severe.
Every site has a different video player, requires varying tandem banner sizes (some require more than one), accommodates a different file format, does/doesn't accept third-party video ad serving (most do not), does/doesn't have clickable video (most do not), has minimum investment levels, has questionable methodology, uses a third party to traffic, schedule and manage its campaigns, and will not accept branding studies.
The key players in the marketing and publishing communities were beginning to mobilize, understanding the need to sit in a room -- for however long it might take -- and hash things out. The ad-serving vendors, now larger than before and with interests far and wide, need to participate, and do so with the interests of the medium in mind. Once they agree to do this, the current -- and likely ongoing -- consolidation taking place within the medium will certainly bring some long-term stability, practically speaking, of course.
Bryon Evje is COO, Broadband Enterprises. Read full bio.