Buyers will soon have far more transparency into video ad inventory sold through Google’s platform.
Google confirmed to AdExchanger that DV360, its demand-side platform, has already adopted the IAB Tech Lab’s new video.plcmt field in OpenRTB bid requests. This field is where publishers and SSPs categorize their inventory based on the Tech Lab’s new video classification guidelines.
According to Google, DV360 has been ingesting the video.plcmt field since last year. An agency source that requested anonymity confirmed to AdExchanger that buyers are able to see how a publisher classifies its inventory in DV360 so long as the seller’s SSP is sending the video.plcmt value in bid requests.
On April 1, therefore, when Google begins requiring publishers to include the video.plcmt field in all AdX bid requests, buyers will already be set up to adjust their bids in DV360 based the new standard definitions.
But these developments have publishers and video platforms worried that Google demand will no longer bid on large chunks of their reclassified video inventory – although the change could eventually attract higher bids for certain video placements.
No longer instream
When the IAB Tech Lab introduced its video guidelines last March, it formalized a narrow definition of instream video and created three new subcategories for what was previously considered outstream (“accompanying content,” “interstitial” and “no content/standalone”).
To qualify as instream inventory, users must arrive on a page expecting to watch video, and the sound must be on. YouTube or CTV would qualify.
Instream differs from accompanying content, which is video that features some form of content and ads but isn’t the focal point of a page. Autoplay, muted video in a floating player, for example, would fall under accompanying content.
In AdX, publishers were previously able to classify what is now called accompanying content as instream, said Eric Hochberger, co-founder and CEO of publisher monetization platform Mediavine.
But under the new guidelines, publishers must clearly label accompanying content as such in the video.plcmt field – and Google advertisers may start placing lower bids for this inventory now that they’ll have clearer insight into what it is.
The anonymous agency source said buyers will pay a much higher premium – comparable to CTV – for instream once it’s more clearly labeled within Google AdX. The source added that prices for accompanying content will likely drop significantly compared to instream, because most buyers would relish being able to avoid floating players.
However, it’s also possible some advertisers will see value in accompanying content and bid for it competitively via Google’s platform, which would drive up prices.
For example, a buyer might want slightly cheaper video inventory that can meet its performance goals, said the agency source. Having some elasticity in the price of video inventory available through Google’s platform could be beneficial for these buyers.
Currently, however, the vast majority of brands haven’t been educated on the IAB Tech Lab’s new guidelines, the source said, noting that they’ve yet to hear a client even utter the phrase “accompanying content.”
So it will take some time before most buyers are even aware of how these new video classifications work or that they have the option to target different types of video inventory.
According to Google, buyers can already use DV360 to target the different types of video using the DSP’s existing OpenRTB specifications. These specs will soon be updated to adhere to the Tech Lab’s new classifications.
“A buyer today can target various inventory types in our UI, including ‘in-article, ‘in-stream,’ ‘in-banner,’ etc.,” said a Google spokesperson. “We will be working to update our nomenclature to reflect the new signal as well, but today, if a partner wanted to buy accompanying content, they could select to target ‘in-article.’”
Deal packaging
But Google’s adoption of the new guidelines in AdX and DV360 will also affect deals that combine different types of video within a single ad buy.
For example, Google currently uses what’s now considered accompanying content to supplement instream YouTube ads bought through DV360, said a source familiar with Google’s video ad deals.
According to Google, it does not plan to change how it packages inventory for such deals. But through its adoption of the video.plcmt field, buyers will now have more insight into what they’re actually getting.
A buyer could therefore request to have no accompanying content included in these deals. Whether or not such requests will be honored remains to be seen.
Standalone standoff
Questions about accompanying content aside, there’s a chance Google demand for what’s now classified as no content/standalone inventory could actually increase.
“No content/standalone” is how the Tech Lab describes what most advertisers would consider outstream video (i.e., video players that are not the focus of a page and only play ads, without any publisher-provided content whatsoever).
In Mediavine’s experience, Google demand has treated “no-content” inventory the same as it does display inventory, Hochberger said. That means Google buyers bid on so-called outstream video impressions at display inventory rates – and display attracts far lower CPMs compared to video.
For this reason, Mediavine doesn’t currently sell its outstream video inventory through AdX, he said.
A Google spokesperson disputed this claim, saying “it would not be accurate to state Google currently treats all outstream video as display inventory.”
The key word is “all.” The agency source confirmed that, in some cases, buyers do bid on no-content/standalone video inventory at display inventory prices through Google’s platform.
However, once AdX migrates to the new standards, Google advertisers should start bidding higher on outstream, including no-content/standalone, because it will be clearly labeled as a type of video, Hochberger said. This transparency could raise the CPMs for these placements and bring incremental revenue to publishers, he said, adding that Mediavine may turn on AdX for outstream if this happens.
The agency source agreed that no-content/standalone inventory could attract higher prices once AdX clearly labels it as video.
But there are still a lot of unanswered questions about how auction dynamics will work once AdX and DV360 begin factoring the new video standards into bids, and how bidding pressure will affect prices.
Meanwhile, it’s likely Google demand won’t fully adapt to the new standards until at least a few months after April 1, according to the agency source. That means publishers can expect short-term pricing fluctuations until bid dynamics eventually normalize under the new classifications.
DSP adoption
But, while DV360 will be ready to ingest the new video classifications when AdX begins passing them next month, plenty of other DSPs haven’t yet solidified their plans for accommodating the new OpenRTB values.
“No DSP has fully implemented the Tech Lab’s new video guidelines,” said Luca Bozzo, director of programmatic operations and partnerships at Connatix, a video platform that has long specialized in what’s now considered accompanying content.
“The Trade Desk (TTD) and DV360 are only ingesting the new values, but buyers are not able to bid specifically on accompanying content through any DSP right now,” he said. “While it’s likely that TTD is seeing a good amount of demand for accompanying content as buyers change their strategies, they are not able to take any action.”
So the question remains how these new designations will impact pricing once DSPs start using them to adjust bids.
A number of publishers shared with AdExchanger that, when testing the new video guidelines in AdX, they saw 20% to 63% drops in video ad revenue, depending on how much autoplay video inventory they had.
However, when accounting for other SSPs – most of which have been passing the new video.plcmt spec in their bid requests for a while now – publishers saw their video revenue fall by only around 15% on average.
The remaining 15% gap may be filled once DV360 buyers can adapt their bids accordingly.
But it’s hard to say how demand and pricing dynamics will further change when other DSPs implement the new guidelines, which the majority have yet to do.
AdExchanger reached out to several major DSPs for a status report on their plans to adopt the new guidelines. Other than TTD – which confirmed it began implementing the standards last year – only Viant responded in time for publication.
According to Viant, it’s currently testing to determine whether the way publishers classify video inventory allows advertisers to achieve the KPIs they’d expect from those types of video ads. But Viant has not fully implemented the new standards.
“Although incorporating more signals could enhance the purchasing decision, it’s important to note that definitions such as video.plcmt are self-reported,” a Viant spokesperson said. “Therefore, our main focus is on validating these labels to safeguard buyers’ and our customers’ interests.”
While it’s possible that wider DSP adoption will eventually help fill the 15% revenue gap publishers are seeing, until more DSPs get on board with the Tech Lab’s new video specs, we won’t know how buyers are really reacting to different types of video inventory.
Update 3/22/24: This article has been updated with additional details provided by Google on how buyers can target accompanying content inventory in DV360 today, and the DSP’s plans to update its OpenRTB specs to adhere more closely to the IAB Tech Lab’s new video classifications.
Also, after publication of the story, Connatix clarified it’s view that, while The Trade Desk is ingesting the new video.plcmt field, buyers cannot currently use the DSP to target accompanying content. We’ve reached out to The Trade Desk to confirm this and will update the story when we hear back.
