Mass personalization of video advertising is set to be a defining trend over the next 2-3 years, with the advertising industry on journey towards delivering increased ad relevance. The development of programmatic buying has been the first step, allowing advertisers to target audiences on a growing range of media and platforms, including video. But, in general, large numbers of people still see the same generic, non-personalized creative. 

The next stage is to tailor video creative to individuals, households or segments – using personalization technology to create hyper-relevant experiences. There are many ways in which video ads can be personalized, such as altering a featured product, promotion, store location, voiceover or music track depending on the viewer’s interests.

Emerging evidence suggests that these highly relevant, personalized video campaigns are more effective. In recent studies, campaigns with personalization achieved 6x higher engagement lift over non-personalized ads , and up to ten times higher engagement than non-personalized creatives.

There is growing advertiser demand for personalized video creative

Major advertisers and agencies are excited about the opportunities for mass personalization to increase relevance and improve campaign effectiveness – and are increasingly interested in personalization on broadcaster video services, including linear TV. Targeting and personalization were top 3 digital marketing priorities for 24% of organizations in 2018, with 55% planning to increase their budget for personalization. 69% of major advertisers have already invested in dynamic creative platforms for programmatic or plan to invest in the next year. 

“Our clients are facing increasing pressure from the rise in consumer expectations, the mainstreaming of direct-to-consumer brands and new data regulations. The only response is to deliver personalized experiences at scale.” Arthur Sadoun, Chairman and CEO of Publicis Groupe

Mass personalization is increasingly part of agency DNA and holding groups are building up relevant skills and capabilities, such as acquiring data assets. In April 2019, Publicis Groupe acquired Epsilon to accelerate the implementation of its strategy to deliver personalized experience at scale. Similarly, in October 2018, IPG completed its acquisition of Acxiom, a provider or marketing data and services.

In some cases, major advertisers have developed personalized video campaigns for social platforms. 

Toyota ran a Facebook and Twitter campaign for its RAV4 model that delivered 100,000 different video permutations of 100 video assets, driven by the Facebook history of the user. Importantly, advertisers and agencies are now seeking mass personalization capability on high-reach quality broadcaster video inventory, including linear TV – they do not want to be restricted to social video and display.

Broadcasters have an opportunity to close a capability gap with internet competitors

A capability gap is opening up between online and social video – which can deliver dynamic creative now – and the broadcaster video and addressable TV markets which generally lack this capability. YouTube offers Director Mix, a tool for creating dynamic video creative for the social platform. In 2018, Buick ran a campaign involving dynamic pre-roll ads on YouTube with contextual custom video messaging relevant to users and the content they are watching. Facebook offers a dynamic creative option that automatically optimizes creative for audiences, assembling custom ads from video, image and text components supplied by the advertiser. Broadcasters have made relatively limited progress in developing dynamic creative. Only in certain instances, such as All4 in the UK, have they developed personalization capability and, in most cases, this is on online platforms and connected TV only.

Current personalization capabilities of broadcaster video ad inventory

Notes:

1. The development of addressable ad insertion and programmatic sales for linear TV are limited to certain markets and platforms.
2. Synthesis of sources including Group M, Zenith, Magna Global, eMarketer, Strategy Analytics.
3. Personalization capability varies depending on the technology implementation.
4. Sky has announced plans for programmatic sales of linear TV advertising.

There is a strong opportunity for broadcasters to develop user- or household-level personalization on broadcaster online video services, connected TV, VOD and addressable TV. Increasingly, technology solutions are available to enable this capability. For example, in the UK Cablato supported a personalized campaign on Sky AdSmart.

On legacy linear spot advertising and programmatic TV advertising, targeting options are more limited, but there is an opportunity to tailor creative to spots – showing different versions of an ad in different regions and contexts. In the US, there are 210 designated market areas, and programmatic TV is relatively well-developed, allowing advertisers to buy particular spots, based on audience data.

Strong rationale for broadcasters to act now

There is a strong rationale for broadcasters to act now to develop their personalized TV creative capabilities:

• Improve the competitiveness of their online video ad propositions. Broadcasters are increasingly competing with YouTube and Facebook for share of ad spend. These internet platforms are rapidly developing their ad offers and broadcasters need to innovate to remain competitive.
• Generate incremental revenue. Advertisers are likely to pay a premium for the increased relevance and effectiveness that personalized video inventory offers. [Placeholder for A+E quote about selling personalized inventory at a premium].
• Leverage audience data. Broadcasters can use their first-party data, and brands’ data, to support personalization and generated incremental revenues.
• Provide a platform for house ads. Broadcasters are increasingly competing for audiences with SVOD providers such as Netflix and Amazon Prime. These internet players are data-first businesses, with well-honed marketing operations. Broadcasters need to improve their marketing and can use personalized video creative capability to deliver more relevant house ads, promos and communications.

Broadcasters need to overcome a range of challenges to implement personalized video ads

In order to provide clients with personalized or tailored video creative capability, broadcasters need:

1. Addressable video advertising inventory – on online video and/or TV platforms -for individual or household personalization. Or, for broader tailoring of creative to spots or regions, the ability to sell specific spots.

1. Data – audience data or contextual data for use in decisioning.

1. Personalized TV ad solution – to generate relevant creative, analyze data and select relevant creative, interface with ad serving infrastructure and manage the buy side.  

In developing a solution or selecting a supplier, broadcasters face a range of challenges:

• In most cases, broadcasters distribute across multiple video platforms, from owned and operated online video services to third-party TV platforms, with different data and targeting capabilities. Ideally, a personalized video solution would work across these disparate platforms – on online video now and addressable linear TV as it gains traction in the longer-term.
• Broadcasters operate streamed video services as well as video-on-demand. Inserting personalized advertising into streamed services involves technical challenges, particularly achieving low latency.
• In most markets, there is no common data taxonomy. Broadcasters collect and process data, and segment audiences, in different ways. Consequently, it is challenging for advertisers to develop tailor creative in the same way across broadcasters, which limits the market.
• Data portability is limited by the GDPR in Europe. It is easier to implement personalized video creative if data is processed on a broadcaster’s systems, not third-party systems.
• Ad failure rates can be high, especially on streamed services, impacting the viewer experience. Up to 47% of ad insertion attempts on streaming video services do not result in the ad being seen as intended. Ensuring a good quality experience is a top priority for many broadcasters and requires solutions designed to minimize risk of drop off.
• The broadcaster video market is relatively fragmented in terms of media and platforms, but advertisers want to run campaigns at scale across these media. Broadcasters need to work with a personalization solution that is compatible with their peers in terms of segmentations and buying and trafficking processes.
• In most markets, broadcaster ad creative needs to go through regulatory compliance checks. Broadcasters need a personalized video supplier that is able to integrate with this process to pre-approve creative as appropriate.

A promising future for personalized broadcaster video?

If broadcasters can overcome these challenges, then they can strengthen their advertising propositions relative to internet competitors and tap into growing demand for personalized campaigns. Implementing personalized creative will improve the prospects of growing their businesses over the coming years.