What are the risks of brand damage to watch out for when placing video ads?

In February 2016, Dentsu Inc. announced the launch of its "Premium Video Series," video ads that contribute to corporate branding using its proprietary large-scale PMP (Private Marketplace, an automated trading system limited to premium ad slots). This initiative responds to the rapidly growing demand for video advertising. So, how should companies leverage video advertising today?

We spoke with Yoichi Tanaka, CEO of Teads Japan (also a Dentsu PMP partner), and Ryota Murayama from Dentsu Digital Inc. Business Bureau about the challenges companies face and the latest video advertising landscape.

We want to build brand awareness on the web, just like TV commercials do

──First, please tell us about the challenges advertisers currently face.

Murayama: Many advertisers want to leverage web video advertising. The reasons include reaching users not reached by TV commercials and gaining access to precise targeting and detailed performance data compared to offline media.

However, the current web advertising environment doesn't fully meet advertiser needs. Presently, most domestic video ads are on YouTube. While YouTube video ads show significant growth and satisfy many advertisers, there's a growing demand to deploy video ads on other platforms and formats.

Tanaka: I believe YouTube has been valued for video advertising because it allows for the playback of polished videos, similar to TV commercials. Teads, which began in Montpellier, France in 2011, reasoned that embedding this video advertising into regular text-based websites could increase reach. The idea was that premium sites like newspapers and magazines, which we call "premium publishers," offer a clearer view of users' lifestyles based on the content they consume. This would allow for more precise targeting aligned with advertiser needs. Teads has networked approximately 500 premium sites globally. In Japan, it started with 50, but Dentsu Inc. PMP now covers as many as 230 media outlets.

──What kind of advertisers are seeking video ads?

Murayama: Many advertisers who previously built their brands through TV, newspapers, and magazines now want to do the same online. Consequently, the role of web advertising itself is changing.

Traditional programmatic advertising focused solely on the bottom-of-funnel "harvesting" conversions, using CPC (cost per click) and CPA (cost per acquisition) as primary performance metrics. However, I believe programmatic advertising will increasingly be used for branding and promotion, much like television or newspapers. Here, programmatic advertising refers specifically to PMP (Private Marketplace) programmatic, not traditional RTB (Real-Time Bidding) programmatic. RTB carries the risk of brand damage because placements are unpredictable, making it unsuitable for branding initiatives. Conversely, PMP programmatic, which allows for precise targeting while specifying placements one by one like display ads, is highly compatible with branding campaigns.

*For details on the RTB and PMP classification, see here.

Solving the web advertising problem: "You never know where your ads will appear!"

──What are the benefits of using Dentsu Inc. PMP's Premium Video series?

Murayama: First, you can place video ads on premium media beyond YouTube. The Premium Video series allows you to specify each media outlet individually for ad placement. Additionally, it offers various formats and, being programmatic advertising, enables targeting and the ability to run PDCA cycles.

Tanaka: For example, imagine a businessman watching YouTube at home in the evening. Even if he's watching videos related to his hobbies, the video ads that play before the content might be business-related. While the targeting might be accurate, he doesn't want to see business ads during his downtime.

With Dentsu Inc. PMP, we can deliver more relevant ads by limiting the websites where ads appear. When someone is browsing "Toyo Keizai Online," they are undoubtedly interested in business at that moment. Placing a clean video ad in a click-to-play player here significantly boosts effectiveness. Advertisers value how well their target audience aligns with the media's audience.

Murayama: A major issue with current web advertising is "not knowing where ads will appear." That's why Dentsu Inc. PMP, which aggregates premium media and allows placement selection, can offer significant advantages to advertisers during branding campaigns.

Tanaka: Regarding the media outlets where ads are placed, Dentsu Inc. PMP includes most major mainstream media, such as newspaper-affiliated sites, portal sites, and specialized sites. It seems they are actively considering it because video ads can run even on media that don't have video content themselves.

──Do advertisers also view "not knowing where ads will appear" as problematic?

Murayama: Yes. With traditional programmatic advertising (RTB), where you can't specify placement media, ads might appear on unintended sites, potentially causing "brand damage." While this aspect has often been overlooked in Japan when running programmatic ads, foreign advertisers take it very seriously.

Tanaka: In Japan, there was a major incident where a large company's ads appeared on adult media sites, causing significant problems. If you're using web ads to build awareness, you absolutely must avoid this kind of brand damage risk.

Murayama: There's also the issue of viewability (how much of the ad is actually seen). Very few Japanese advertisers are conscious of viewability, and consequently, publishers aren't implementing many improvement measures. As a result, many media outlets have extremely low viewability rates, even when ad slots are in the first view, due to problems like loading times.

──Why don't Japanese companies and marketers prioritize issues like brand damage and viewability?

Murayama: It's likely because they prioritize the efficiency of "harvesting." There's a tendency to focus heavily on click-through rates. The role of web advertising was seen as "harvesting," while TV handled the promotional aspect of building awareness. It's only recently, as they've started rethinking web from a TV perspective, that these issues have begun to be recognized. Additionally, within companies, TV promotion and web advertising are often handled by different departments. Naturally, when the departments are separate, the KPIs differ. Promotion and branding are handled by TV, while web is just about "harvesting" – as long as CPA and CPC are good, that's sufficient. I think this sectionalism within companies is also part of the problem.

Tanaka: Having been in this industry for about 15 years, I also think web ad formats weren't particularly good for branding. That's finally improved with the advent of video ads. I feel that video ad formats have made it possible to convey the brand stories and messages that were communicated through TV commercials, even on smartphones.

<Continued in Part 2>