Both advertisers and publishers are bullish on digital video advertising’s future, according to the results of a study commissioned by video advertising firm Teads and conducted by Forrester Consulting.

Forrester surveyed 529 decision-makers representing advertisers, agencies and media companies in Argentina, France, Germany, Italy, Mexico, Spain, the UK and the US. It found that at least 70 per cent of agencies and advertisers expect video budgets to increase in the next two years, while on the sell-side, 73 per cent of media companies plan to offer more volume of video inventory to meet demand.

Advertising challenges
But the study also identified challenges that are holding advertisers and media companies back from fully pursuing digital video advertising solutions. Foremost among these are the definition, availability, and lack of premium video inventory; and the ability to assure digital video advertising performance.

50 per cent of agencies, and 46 per cent of advertisers surveyed, cited a lack of verification that the ads were delivered to the intended audience as the main factor they thought would inhibit adoption of, or spend in, digital video. Issues around measurement standards were identified as the second and third most important inhibiting factors, with “lack of premium video inventory” in fourth place, cited by 40 per cent of agencies and 27 per cent of advertisers.

When media owners were asked about the challenges they had experienced selling video ad inventory, the main one was lower than expected ROI (cited by 44 per cent of respondents); followed by “video is too small a part of our overall revenues to dedicate sales or traffic manager resources to it” (40 per cent); and a lack of video inventory (37 per cent).

Reassuringly for Teads, when asked what types of video advertising would be more or much more important that today, outstream advertising, which Teads specializes in, came out on top. Outstream advertising appears outside of the normal video ad stream, typically within editorial content. It was cited in the study as likely to be more or much more important in the future by 77 per cent of agencies, 70 per cent of advertisers, and 69 per cent of publishers.

“I believe that the latest study from Forrester Consulting reinforces what we’ve known for some time – that outstream advertising presents a huge opportunity for media companies, advertisers and agencies looking to achieve success in digital video,” said Teads CEO, Bertrand Quesada. “As the inventors of outstream video advertising, Teads is well-positioned to solve the industry’s premium problem by delivering innovative formats that drive greater results from digital video advertising.”

David Murphy writes:
The results of the Teads/Forrester study were presented at an event for publishers, advertisers and agencies in London this morning. In the opening presentation, Teads – it rhymes with beads and means Technical Advertising –  founder and chief executive Pierre Chappaz took the opportunity to outline how Teads’ outstream advertising works.

It’s a very neat solution. Say you’re on the Guardian’s website or mobile site, scrolling through an article. The Teads-powered ad pops up in the middle of the editorial content, with sound – which sounds intrusive – but keep scrolling (i.e. ignore it) and it disappears. It’s a format which Chappaz was happy to tell the assembled audience that Facebook has copied, but without the advantage of sound, which only comes in on Facebook when the user clicks on the video ad. He added that the percentage of videos watched for a minimum of three seconds on Facebook is 3 per cent, while the corresponding figure for Teads videos is 60 per cent.

Perhaps the most compelling USP for Teads, however, apart from the user experience, is the way the inventory is sold. Teads buys the space on a CPM basis from the publishers, then sells it to advertisers on a CPCV (Cost Per Completed View) basis, so if a user watched 15 seconds of a 20-second Teads video, the advertiser pays precisely nothing.

No wonder the company has gained so much traction in so little time.