If there were any established rules in programmatic, one of them would surely be that video is for branding, and display is for direct response. At least that’s the sense you get talking to video ad tech players, who have concentrated their energy on convincing marketers that online video is just like TV.
But Montreal ad tech company SourceKnowledge thinks programmatic video doesn’t have to be just like TV. The rationale is that because of how targeted and measurable it is, online video can be just as much a vehicle for direct response as for branding. The company has just rolled out a new platform, Engage, that’s dedicated to the specific niche of performance-optimized video.
“Typically, agencies when they’re looking at video are looking at how this works within their TV budget. So a lot of our competitors are looking to find ways of taking TV budget and bringing it into the web,” said Patrick Hopf, SourceKnowledge CEO. “We’re looking to work more with direct marketing teams.”
Despite the all the hype about programmatic branding, two thirds of the ad dollars spent in programmatic still go to conversion-focused performance campaigns, according to the U.S. IAB’s annual ad revenue report. In recent months, advertisers’ continuing investment in performance has caught the attention of a couple big programmatic players, like Rubicon, which bought Chango in April to form an intent marketing division, and Xaxis, which launched a mobile-first performance sub-agency, Light Reaction, earlier this month.
Building on the back of successful conversion-focused campaigns for e-commerce clients like Frank & Oak, SourceKnowledge’s Engage platform includes tools for dynamic A/B testing of creative, sales attribution and reporting tools focused on new/repeat customers and lifetime value. The new platform will run alongside SourceKnowledge’s existing video platform for audience targeting, and will have access to the same supply sources, including YouTube.
Engage also adds some clever sequential retargeting capabilities, which can deliver followup display ads to high-value viewers. Hopf says the most effective strategy has been to ensure the retargeted banners are consistent with the video creative that the user has just seen, to make the connection very clear and transparent.
The platform’s pricing model isn’t quite a cost-per-click — Hopf said it’s more of a “hybrid model” that combines a standard dynamic CPM with guaranteed performance outcomes, similar to the way Facebook prices its autoplay product ads. The result is the same as CPA: SourceKnowledge doesn’t get paid unless it can deliver the credit card transactions, email signups or account subscriptions that the client is looking for.
One potential barrier to performance video is the cost of creative. Acquisition campaigns tend to have a lot less budget to spend hiring actors and production houses.
But SourceKnowledge manager of product and marketing Justin Adler said that’s not as much of a problem as it might seem. Based on the performance campaigns it’s already run, SourceKnowledge has found that short, product-focused ads tend to perform better on conversion metrics than repurposed brand videos or TV spots.
Compared with a branding spot, a 10-second ad showing off the advertiser’s retail catalog can be a lot faster and cheaper to make. For direct marketers who don’t have the internal resources to do so, SourceKnowledge offers creative services through its external partners.
“I think we could get a good, tight message for our partners done in seven to 10 seconds,” said Hopf. “Quicker is going to be better, especially as we do more and more mobile.”
