IAB Netherlands Online Video Handbook 2016

Online Video Handboek 2016
1 ONLINE ADVERTISING
1.1 The history of online video ads
1.2 What is online video?
1.3 Online video advertising formats
2 REACH AND PRICING MODELS
2.1 Media spend
2.2 Reach
2.3 KPIs & Pricing models
3 TRACKING AND CONTROL
3.1 Event tracking
3.2 Viewability
3.3 Brand safety
4 TECH
4.1 Standards
4.2 File types
4.3 Players
4.4 Client side & server side
5 SUPPLY & DEMAND
5.1 Demand strategies
5.2 Supply strategies
6 THE FUTURE: A DIVIDE BETWEEN TELE-
VISION AND ONLINE?
INDEX.

Online Video Handboek 2016 pagina 3
SPONSORS.

On behalf of the IAB Taskforce Online
Video
Michele Appello
Chairwoman
Martijn Garretsen
vice president
The handbook taskforce
was lead by:
Mirjam Berkheij
spotx
Members of the IAB Taskforce
Online Video:
Blue Billywig
Comscore
De Persgroep
Exponential
GroupM
Havas Media
Improve Digital
MarkandMini
RTL Nederland
Sanoma
SBS Broadcasting
Smartclip
SpotX
STER
StreamAds
The Online Company
Videology
Webleads
Weborama
Vivaki
Zigt
Design
Studio Luidspreker
COLOPHON.

Online Video Handbook 2016
Video is the most impactful way to deliver a message with emotion,
making video advertising extremely suitable for marketing purposes. Online video is
hot. Incredibly hot. IAB Nederland aims to accelerate digital growth. For this
reason, we are happy with - and proud of this handbook. This manual provides
detailed descriptions and advice while removing trade thresholds in order to
facilitate co-operation between businesses. This is of great importance as video is
experiencing rapid growth. Since 2008, we have seen a double-digit increase in
video spend in the Netherlands. The advertiser's demand for video streams is so
high that the supply side can hardly deliver. New formats and ways to serve video
are a direct result of this increase in demand. In this manual the Taskforce Online
Video presents a clear overview of all forms of video advertising and ways to profit
from this trend. A nice handbook to guide marketers and other stakeholders
through the dynamic universe of online video.
Jeroen Verkroost
Director IAB Nederland
page 5

##
1.1
##. 1 ONLINE
ADVERTISING.
Weareallfamiliarwiththeconceptonline
videoadvertising.Infact,wearebeing
confrontedwithvideoadvertisingonadaily
basis.Everyone usestheirowndefinitionsto
bestdescribetheconcept.Todrawaclear
frameworkforthishandbook,wewillfirstfocus
ontheoriginsofvideoadvertising,whatwe
meanbyvideoadvertising,anditspossibilities.

The history of online video advertising is a relatively short one.
Online innovations follow each other in rapid succession. It can be
challenging sometimes to stay ahead of it all.
In the early days of the internet, content largely
consisted of text only. The advancement of
internet connectivity enabled the addition of
images, followed by video not long after. With the
arrival of ADSL and glass fiber internet the amount
of videocontent increased even more.
Before long, publishers were looking into ways to
earn back their investments and run a profitable
website using videocontent. Inspired by
successful TV formats, the pre-roll format came to
be.
On a technical level, SDKs (Software Development
Kits) were initially used for specific ad networks or
websites. Each business used theirown
technique.
Online video advertising became increasingly
popular and was picked up by more and more
advertisers. All these different techniques also
introduced new problems. As every system
tracked results in a different way, advertisers were
not only struggling to measure the amount of
reach but especially the results of theircam-
paigns.
To solve this issue, the VAST specification was
introduced to the video advertising marketplace in
2008. The aim of this VAST specification was to
standardize the deployment and event tracking of
video advertisements. The adoption of the
specification took some time and various
iterations have been carried out to improve the
VAST specification. VAST has since been widely
adopted throughout the industry and has become
the accepted standard, with VAST 2.0 the most
supported version.
The VAST standard enables the serving of video
ads. Contrary toTV, online provides you with the
opportunity toclick for more information. In order
to fully exploit this potential, a format was
developed which encourages to user to interact
with the video.
1.1
THE HISTORY OF ONLINE
VIDEO ADS.
“Contrary to TV, onli-
ne provides you with
the opportunity to
click for more infor-
mation.”

“The amount of video ads,
served across all formats,
increases on a yearly basis”
Inordertostandardize thisdevelopment, theVPAID
specification was regularly updated.
Current and pastdevelopments with regards to
watching television andotheronline mediacontent
on variousdevices pose acontinuouschallenge to
the specification. Support forAd Pods was added to
theVAST3.0 update, whileVAST4.0 wasenriched
with support fortelevision. Furthermore, VPAID 2.0
wasdeveloped tosupport mobiledevices.
The handbook’s tech chapter will elaborate on
these specifications. We will also shed light on the
future and the challenges that will continue to
prompt innovations in online video advertising.

1.2
WHAT IS
ONLINE VIDEO?
The various ways in which people consu-
me video (amongst other content)
prompted the arrival of different forms of
video advertising. Sometimes in addition
to media content (in-stream), but also
untied to any content (out-stream).
Video ads can be served in a numberof ways.
Mostly this happens via the market standard VAST,
but especially out-stream formats are often served
according to Rich Media display standards.
Todraw a clear framework for this handbook, we
focus on online video ads that present themselves
to their audience using the VAST specifications.
The definition then, is as follows;
“A video ad is a commercial
that can be played on any
device before, during or after
media content (in-steam) or
alongside other content
(out-stream) – provided it is
served according
to the VAST standard. ”
Online Video Handbook 2016 pagina 9

1.3
ONLINE VIDEO
ADVERTISING
FORMATS.
The definition of online video introduces two types of video advertising
that function using VAST: in-stream and out-stream.
These two ways of advertising can be divided in multiple formats, as
shown in the diagram below:
IN-STREAM
In-stream video advertising is a commercial that
appears before, during or after the media content.
Essential for in-stream advertising is that the
video is never posted as a stand-alone ad but
adds to the media content, be it a game or a video
fragment.
LINEAR
The mostcommon formats in the in-stream cate-
gory are the linear formats.
• PRE-ROLL a video ad (typically 15 to 30 se-
conds in length) that plays before the streaming
content.
• MID-ROLL a video ad or ad unit that plays
during the streaming content. The content is
paused before – and resumed after watching
the video ad.
• POST-ROLL a video ad that plays after the
streaming content.
Example Preroll
Online video formats
Post-roll OverlayMid-roll Social
buttons
Pre-roll
InterstitialIn articleNon - linearLinear
OutstreamInstream
Source: kijk.nl

A variation to the standard linear ad is the
interactive pre-/mid-post-roll. The consumer is
encouraged to interact with the ad. The duration of
the ad may be extended depending on type of
interaction selected by the consumer.
Once engaged, the consumerdoes not leave the
player’s frame. This type of ad is served confor-
ming toVPAID specifcations.You can read more
about this in the ‘Tech’ chapter.
NON-LINEAR
A non-linear video ad is played alongside the
content so that consumers view the video and the
ad simultaneously. Common non-linear ads are
overlays, video skins and product placements.
Overlays are placed on topof the videocontent,
video skins are placed around the player, and
product placements are placed inside the content.
A non-linear ad can be served as text, animated
bannerof button. They may also be displayed as a
videooverlay.
OUT-STREAM
Out-stream is a video ad format that is not
integrated into the media content. It is usually
displayed by loading the player separately, which
disappears after playing the video ad.1
A couple of examples of out-stream ads:
• In article / in-page / in-read a video ad that is
displayed as part of the editorial content.
• Interstitial a format that is frequently served
in-appon smartphones and tablets. On desktop
this format is also known as a lightbox, a video
overlay, a splash page, a prestitial or a fullpage.
In the advertising market place a variety of names
and descriptions are used for the same format.
Sometimes, a seemingly “new format” turns out to
be an existing format, just with another name.
Online Video Handbook 2016 pagina 11
1 Currently, the IAB has not specified out-stream in a standard format.
example interactive Preroll
examplenon-linearad
example Interstitial
exampleInarticle/In-page/In-Read
Bron:Weboramadatabase,rtlxl.nl,Telegraaf.nl,BlueBillywig

2 REACH AND
PRICING
MODELS.
Afterestablishingonlinevideoadvertising,we
willnowmoveontomeasuringsuccess.Asthe
advertiser’smediaspendkeepsgrowing,the
availableadslotsforvideoadskeepincreasing
andvideoadshavemoreKPIstoaimfor
comparedtodisplay.Measuringsuccess
provestobeespeciallyimportantforonline
videoadvertising.Numbersarethedriving
forceforbothadvertiserandpublisher.

Traditional TV
Time spend in front of traditional television
- Decreased with 1.1 % for the ages 18+ in Q1 2015 - Q1 2016
Mobile Video
Annual 25% increase in reach
64% increase in Q1 2015 - Q1 2016*
Bron:Nielsen,TheTotalAudienceReport,December2014
page 13Online Video Handbook 2016
2.1
MEDIA SPEND.
We can identify various developments that
explain the increase in media spend. The
way consumers spend their time has
shifted from watching television to
streaming more and more online video
content on laptops, smartphones and
tablets. TV-screens are also subject to
increased streaming.
As users change the way they consume video
content, new ways of targeting people and buying
media are introduced. Forexample, the divide
between an AV-planner and a digital planner is
narrowing and target audiences on television and
online video allign. Naturally, these developments
influence media budgets as well.
“People stream
more and more
video content on
laptops, smartpho-
nes and tablets.”
* Source: Nielsen Total Audience Report Q1 2016

Online Video Handbook 2016 page 14
ADVERTISING SPEND GROWTH.
Every year, we see the demand for video advertising gro-
wing across the globe. In the Netherlands, 2015 was the
year where this increase became clearly visible:
Q1
€11M
OnlineVideoAdvertising
Y/YAdvertising Spend Growth
17% 22% 48% 36% 39% 32% 23% 29% 25% 27% 35%
€13M
€14M
€20M
€15M
€17M
€17M
€26M
€19M
€21M
€24M
Q1 Q1Q2 Q2 Q2Q3 Q3 Q3Q4 Q4
2013 2014 2015

2.3 KPIS AND
PRICING MODELS.
2.2
REACH.
Currently, agencies use different types of mea-
suring software toestablish reach. However, all
these programs use different ways to measure
reach. This makes it difficult for the publisher to
estimate his reach and difficult for the advertiser
toefficiently buy media.
An additional problem is the combination of online
and television. We are currently experiencing a
shift from television to watching media content
on alternative devices. As a result, the indus-
try is pressured to move television budgets to
online. Independent monitoring of online reach
in combination with television is required to help
marketers embrace this shift. They need to know
on which medium theircampaign will be the most
effective.
A numberof initiatives have already been taken
by the market to facilitate this. The television au-
dience measurement service Stichting Kijkonder-
zoek (SKO) is working on this for the Dutch market
specifically. More information on this topic can be
found at: https://kijkonderzoek.nl/new-strategy.
Other initiatives are launched internationally as
well, such as Making Measurement Make Sense
(3MS). More information can be found on:
http://measurementnow.net.
CTR (Click Through Rate)
The numberof clicks that your ad receives divided
by the total amount of impressions. This KPI was
first used in display advertising. More than in other
countries, this is still an important KPI for video in
the Netherlands.
VTR (View Through Rate)
The numberof completed views (100%) of a video
ad over the total amount of impressions. This KPI
is specific to video advertising and is becoming
increasingly important.
Engagement Rate
A KPI specifically for interactive video ads: the
percentage of consumers who have interacted
with the ad compared to the total amount of
impressions.
The many facets of the online advertising market place have
undergone a standardization process. Reach however is still facing
this standardization process.
This chapter will outline
various Key Performance
Indicators (KPIs) and pricing
models that are using for
online video advertising. KPIs
are used to determine a
campaign’s success. One or
more KPI’s can be selected
depending on the campaign’s
main objectives.

Depending on the KPIs, a pricing model is
selected. The pricing models that are currently
used in the market are:
CPM (COST PER MILLE)
The cost for1,000 impressions.
This is the most commonly used pricing model for
video advertising.
CPCV (COST PER COMPLETED VIEW)
The cost for a completed video ad (100%).
CPV (COST PER VIEW)
De advertiseronly pays when a consumer has
pressed the play button in order to start the video
ad. This KPI is not relevant for auto play video ads,
only for ads where consumers have to press play
to start the video.
CPE (COST PER ENGAGEMENT)
Advertisers only pay when users actively engage
with ads. This pricing model is specifically used
for interactive video ads.
The current merging of the television – and online
advertising worlds raises the question on how
specific KPIs and pricing models should be
combined.
The Gross Rating Point (GRP) pricing model is
used for television: one GRP represents exposure
toone percent of the target audience. Put
differently, one GRPequals one percent exposure
density in the target audience. GRPs are
calculated by multiplying the netto reach with the
average exposure frequency.
The GRPpricing model cannot bedirectly
combined with orcompared to the pricing model
foronline video.
When it comes toonline videocontent, the pricing
model is based on the measurements that can be
detected and managed by both the advertiser and
the publisher.
The final cost is defined by an external, indepen-
dent party not involved in the online ecosystem.
As a result, the costs are not directly accessible to
all parties. At this moment there is no standard
that merges both models.

3 TRACKING AND
CONTROL.
Intheearlydaysoftheonlinevideoadvertising
market,andbeforethearrivaloftheVAST-spe-
cification,itbecameapparentthattherewas
noonewaytomeasureacampaign’sresults.It
wasachallengeformarketerstocompare
resultsacrossdifferentpublishers.Sincethe
arrivalofthespecificationsthewaytomeasu-
reimpressionshasbeendocumentedproper-
ly,yetthedemandformorecontrolremains.
Questionssuchas“Ismyadvisible?”and“Is
myaddeployedonadesirablenetwork?”
remain.Forbothdisplayandvideoadvertising,
thedemandforstandardizationofviewability
andbrandsafetyisgrowingsignificantly.

3.1
EVENT TRACKING.
The most important tracking events in the
specification are:
• Impression: the first frame of the ad started
automatically
• Start: the first frame of the ad started after user
interaction
• First quartile: 25% of the video ad was played
• Second quartile: 50% of the video ad was
played
• Third quartile: 75% of the video ad was played
• Complete: 100% of the video ad was played
• Click: the video ad was clicked
These are not all the available events in the VAST
specification. Next to the events that track the
progress of the ad there are otherevents that
track the interactions with the ad.
For more detailed information:
http://www.iab.com/guidelines/digital-vi-
deo-ad-serving-template-vast-4-0/
The VAST specification specifies that specific actions or events oc-
cur at predetermined moments during video ads. This has strongly
contributed to creating consistency across the advertising market-
place.

The viewability metric is used to indicate
whether a loaded video ad has had the
opportunity to be seen by the consumer.
The IAB US currently has a standard
advice on viewability, however this advice
has not been widely accepted like in
display advertising. The Dutch IAB
supports these following standards:
Viewabilityismeasured byvariouscertified
technologyprovidersthatprovideinsightintothese
metricstothepublisherand /ortheadvertiser.
Various organisations have cooperated to
guarantee the implementation of a measuring
standard, resulting in the Making Measurement
Make Sense (3MS-) initiative. For more specific
information on viewability and this initiative:http://
measurementnow.net
3.2
VIEWABILITY. 3.3 BRAND SAFETY.
Concerning quality, it is also important to take brand safety into
account. Brand safety considers various aspects surrounding the
ad, in order to guarantee the advertiser that the ad is shown on a
desirable network.
Some aspects are measured directly on the web-
site, others are indexed in a database:
• BOT TRAFFIC checks whether an ad request
has really come from a user’s browser or from
a machine.
• MASKED URLS Checkswhetheradeclared URL
is really the URLwhere thevideoad isdelivered.
• BLACKLISTING Sites are indexed based on ex-
plicit content or the absence of videocontent.
The initiative tomeasure isoften taken by the
technologies that are used by the publisher(SSP/
ad server)orthe advertiser(DSP).These parties will
use theirown technologyor3rd party technologies
tocreate a brand safeenvironment forthe
advertiser,ortoalert publishers about activities
concerning brand safety that they were unawareof.
These aspects will become more important as
programmatic video advertising gains popularity,
because the buying process will be entirely
automated with limited to no human intervention.
In the future, more and more advertisers will use
whitelists in order to find their target audience on
the right network. Publishers will need to adapt to
these changes in order to safeguard their revenue.
A video ad is
only viewable
when 50% of
the ad’s pixels
are visible for 2
continuous
seconds

4 TECH.
Whendiscussingonlinevideoyoucannot
ignorethetechnicalaspects.Techplaysa
crucialpartinonlinevideoadvertisingandlays
thefoundationforfutureinnovations.
Theworldofvideoadvertisingwouldhave
lookedverydifferentindeedwereitnotfortech
standardizations.

You need various technical components to deploy video ads. See the
diagram below.
In this chapter we will discuss the VAST, VPAID and Open RTB
specifications, media files and players.
PUBLISHER
PLAYER
PLUG IN
MEDIA FILE
ADVER-
TISER
AD SERVER
/SSP
SPECIFICATION
BASED COMMU-
NICATION

The technology to deploy video ads is
based on standards. The purpose of these
specifications is to facilitate communica-
tion: in order to facilitate sales they need
to ensure that all necessary technical
elements to deploy video communicate
with one another following standard
procedures.
VAST SPECIFICATION
VAST (Video Ad Serving Template) is a standard
communication specification for serving video
ads. It enables every video ad to be played in any
VAST-compliant video player. Before VAST, video
ads had to be adjusted per player, a costly and
time-intensive procedure which complicated large
scale buying. This protocol ensures that every
procedure is standardized and that the tracking
events are fired on set and correct moments. The
VAST specification is written inXML. This is a
coding language which specifies the function of
the piece of code by using the tag symbols. For
example: Mediafile /Mediafile specifies “the
link to the videocontent is located between these
two pieces of code”.XML is a descriptive markup
language. For more technical information:
http://www.iab.com/guidelines/digital-vi-
deo-ad-serving-template-vast-4-0/
VPAID
VPAID (Video Player Ad Interface Definition) is an
addition to the VAST-specification. VPAID uses the
VAST specification and can be regarded as a
complicated media file that communicates with
the player and plug-in. If you want to use VPAID,
you need tocheck if the player you are using is
VPAID-compliant. As not every publisher uses a
VPAID-compliant player the use of VPAID may
affect your reach.
VPAID is often based on a flash file (.swf). A flash
file consists of action script, allowing additional
functionality over a standard MP4 file. VPAID is
being used in twodifferent ways in the advertising
market:
• It offers the possibility to serve interactive video
ads or an ad with social sharing functions.
• The .swf file contains the mechanism for the
bidding process.
Next to these twooptions, VPAID alsooffers
advertisers the possibility to read information
from the consumer’s browser. This way, adverti-
sers can measure viewability and brand safety.
4.1
STANDARDS.

VPAID 2.0
The VPAID specification is primarily based on
flash, or the .swf. As a result, it cannot be used on
mobile devices. In order to allow the same
possibilities on a non-flash compliant device, the
VPAID JavaScript specification was written. This
specification, supported by VAST 2.0, is based on
JavaScript instead of flash but has the same
functionalities.
It is important to mention that this format, just like
VPAID, is only supported by a VPAID JavaScript
compliant player.
For more technical information:
http://www.iab.com/guidelines/digital-video-play-
er-ad-interface-definition-vpaid-2-0/
OPENRTB SPECIFICATION
The purpose of the OpenRTB specification is the
technical facilitation of the programmatic buying
and selling of online video ads. The OpenRTB
specification is used during the programmatic
trading of ads where there is a server2server
connection between the Supply Side Platform
(SSP) and the Demand Side Platform (DSP). This
server2serverconnection needs to be made
through an integration of the two platforms. After
this integration, ads can start trading using this
specification.
The specification’s purpose is to pass on
information about the available video ad slot and
the advertiser’s bidding offer. This bidding
language, based on the coding language JSON,
contains a VAST-XML that communicates with the
player before and after the transaction.
The specification consists of twoelements:
• BID REQUEST – the bid request is sent out by
the SSPserver and contains all necessary infor-
mation for the DSPserver to make a bid.
• BID RESPONSE – the bid response is sent
out by the DSPwhen triggered, and contains
the bidding offer and the VASTXMLor ad for
deployment.
This specification is used for both display and
video.
For more technical information:
http://www.iab.com/guidelines/real-time-bidding-
rtb-project/
“The specification’s
purpose is to pass on
information about the
available video ad slot
and the advertiser’s
bidding offer.

4.2
FILE TYPES.
File types are the files containing the creatives used in the video
advertising market. The video player and the network where the video is
served are determining factors for which file types are suitable.
QUALITY OF THE FILES
The chosen file type may affect the video’s quality.
There are two more VASTelements influencing the
quality of the video ad:
• FILE SIZE the size of the video file (the amount
of bytes) influences the quality of the image.
However, the browser may struggle serving the
video when the file is very heavy. It is important
to find the right balance: you need a file size
that guarantees premium quality without affec-
ting the loading speed. Keep in mind that your
video ad may be served on a mobile device.
• BITRATE the bitrate indicates how many bits
are played per second. A higherquality delivers
a more stable image. The same rule applies: a
higher bit rate demands highercapacity from
your player and your browser. Balance is key.
It is common for ad servers, DSPs, SSPs and
publishers to specify the maximum bit rate and file
size. It is possible and in fact quite common to
include multiple quality options in the VASTXML.
The source is of the highest possible quality. The
player will automatically select the best quality for
the circumstances and the device.

.
.SWF
.FLV
.JS
.MP4
.WMV
.MOV
.WEBM
Linked to VPAID video,
enriched with display elements
Linked to VPAID video,
enriched with display elements
Standard format within VAST
Desktop flash environment with a
VPAID compliant Flash Player
VAST compliant Flash Player
Possible in all environments with a
VPAID JavaScript compliant HTML5-player
Possible in all environments and all
VAST complaint players
Possible in all environments and a
VAST compliant WEBM player
File type Characteris-
tics
Platform-
player suitability

PLAYER PLUG IN
A VASTcompliant playerconsists of twoelements:
• the actual player
• the plugin that makes the video playerVAST
compliant
The plugin is responsibleforthe interpretationofthe
VASTXMLand thecommunication between the
playerand theVASTtrackers. Its purpose isto
ensurethatthetrackersarefired atthe right
moment.Some playersofferacombinationofa play-
erand a plugin. However, these may becombined
separatelyaswell.SomeSSPsorad servers
facilitatethe plugin forthe mostcommon players.
Player/plugin combinations:
• Player with VAST plugin are one
• Player with VAST plugin from a specific SSPor
ad server
• Player with VAST plugin independent of a
specific SSPor ad server
TYPES OF PLAYERS
As outlined in the file type chapter, it is important
to know the characteristics of your player. There
are four types of player:
• VPAID compliant Flash player
• VASTcompliant Flash player
• VPAID compliant HTML5 player
• VASTcompliant HTML5 player
Flash players are still used these days because
many ads contain file types that require Flash.
However, this is rapidly changing as a result of the
increase of mobile devices (and the absence of
Flash on these devices). Additionally, both
Chrome and Firefox are trying to block flash
content from their browsers, encouraging
networks tochange from Flash players to
HTML5 players.
Many players offer a hybrid solution. Depending on
the device and the ad’s send back file type, the
playerdecides to load either a HTML5 of Flash
player. This way, both desktop and mobile are
supported while still safeguarding fast loading
times. The most well-known players for in-stream
in Europe are JW Player, Brightcove, Kaltura,
Ooyala and Blue Billywig.
SOFTWARE DEVELOPMENT KITS
Some software components offer loose software
(SDK) components for the player, plugin and ad
server / SSP in one package. SDKs contain all
necessary components to serve video ads. These
kits are only functional in combination with the
chosen ad serveror technology. Originally, before
the arrival of the VAST specification, these kits
were used todeploy video ads. However, they now
comprise and support the VAST specification.
These days, software development kits are often
used in in-appenvironments. Many SDKs are
limiting in the use of an ad serveror video ad
provider Because the implementation of an SDK
requires an app-update, it is important to make
the right decision.
4.3
PLAYERS.
The purpose of the player is playing the video content. Next to playing the content, the
player may also show video ads. When there is no content, or when the content is not a
video, then the sole function of the player is playing the ad.
“Some players of-
fer a combination
of a player
and a plugin.”

4.4
CLIENT SIDE
SERVER SIDE.
Theconcepts “client side” and “server
side” may be the most technical concepts
when talking about serving video ads, but
they are very relevant. Both concepts
describe waysofcommunicating.The
difference lies in theelementsof the
communication.
CLIENT SIDE
Communication takes place between a server and
the consumer’s browser (the client). The
consumer’s browser is responsible for sending the
information from the server to the player that has
to play the ad. It furthermore assembles any
missing information from the browser header.
Communication time depends on the speed of the
consumer’s device.
SERVER SIDE
Communication takes place between two servers.
The server is responsible for sending information.
Servers typically have a higher processing
capacity than the consumer’s browser; they were
developed to be quick. When more technical
serving processes take place between server to
server, the faster the process will take place.
Serving video ads can be split up in four process-
es. These processes may be carried out either
client side or server side.
It would be conducive in terms of speed if all these
processes would take place on the server side,
but the browser (client side) holds the advantage
of being able to receive a lot of information (for
instance cookie information). For this reason,
many processes still take place on the client side.
Various initiatives (forexample in VAST4.0) are
launched to bring more processes to the server
side. The rise of ad blockers and addressable TV is
a big incentive for this initiative.
An ad is requested (Ad call) Client side,
for both mobile and desktop
Client side,
Client side,

More and more often server
side. However in the case of 3rd
party VAST URLs or VAST URLs
that are bounced during the
bidding process, it is important
that this process takes place on
the client side. The client side
can detect and replace VAST
URLs that are not delivered by
the Ad server / SSP. Program-
matic buying and selling takes
place on the server side.
The ad server or Supply Side
Platform (SSP) checks which ad
should be deployed (bidding
process)
Ad serving
Ad tracking (impressions and
quartiles)
Process Client side or Server
side

5 SUPPLY
DEMAND.
Thewayonlinevideoadsareboughtandsold
hasundergoneasmallevolutionthepastfew
years,withthearrivalofprogrammaticleading
thechange.Thischapterdiscussesvarious
supplyanddemandstrategies.Wehave
decidednottofocusonthecurrent
discussionsaroundGRPsorthewayinwhich
thebuyingparadigmisshifting.

We currently know three ways of buying
media, depending on the cost and the
preferences of the advertiser and the
media agency.
DIRECT BUYING
We speak of direct buying when a media agency or
advertisers directly contacts the publisher in order
to buy a specific set of inventory or audience. This
type of deal has a predetermined start- and ending
date and a set amount of impressions for a fixed
price. If, for whatever reason, the publisherdoes
not meet the guaranteed amount of impressions,
they usually offer some form of compensation to
maintain the original agreement.
BUYING VIA A COMMERCIAL NETWORK
Sometimes media agencies or advertisers decide
to buy their media inventory via a commercial
network containing more than one publisher that
can reach the advertiser’s target audience. The
rules of direct buying apply here as well.
PROGRAMMATIC BUYING
Programmatic buying comprises the real time
bidding for inventory. The last few years the
market has seen a strong incline in the numberof
ads served through real time bidding.
A Demand Side Platform (DSP) is required for
programmatic buying. This platform enables
bidding on the advertiser’s side.
Theadvertisercan buyvideoadsintheDSP, based
on hisorherpreferencesand thepotential bidding
price.Thisispossibleineitherofthefollowingtwo
ways,whicharealsoused indisplayadvertising:
• OPEN EXCHANGE inventory can be bought by
any publisheror any audience available on the
Supply Side Platform. The publisher usually sets
a floor price, the starting price for buying inven-
tory below which no bids are accepted.
• PRIVATE EXCHANGE an agreement is made
between the publisher and the advertiseror the
media agency. This deal is handled automati-
cally by the DSP. The deal is linked to a unique
deal-ID and defined in both systems toensure
technical recognition of the agreement. The
floor price in the private exchange usually
differs from the publisher’s fee in the open
exchange.
5.1
DEMAND STRATEGIES.
“This type of deal has
a predetermined start-
and ending date and a
set amount of impressi-
ons for a fixed price.”

##
1.1
##.SECOND HIGHEST BID
The programmatic bidding process is based on
the ‘Vickery Auction’. A Vickery auction is a type of
sealed-bid auction where bidders submit written
bids without knowing the bid of the other people
participating in the auction.
It is common in programmatic buying that the
‘second highest bid’ is paid, rather than a set
price. This is to avoid algorithms from calculating
the cheapest buying price, yet at the same time
enables the estimation of the publisher’s
inventory value.
So how does this work? The advertiser placing the
highest bid does not pay the price of his bid, but
the price of the second highest bid, plus 1 cent. In
case of noother bidders, or when the second
highest bid is lower than the publisher’s set floor
price, the floor price counts as the second highest
bid.
In this example KPN wins the bidding. They will
pay the second highest bidding price (placed by
L'Oréal), as their bid is higher than the floor price.
PUBLISHER
INVENTORY
FLOOR PRICE
€15
L’OREAL
€20
KPN
€25
IKEA
€17
COLGATE
€10
WINNER!
PRICE: €20,01

In this example KPN wins again, but as
the second highest bid (placed by Ikea) is
lower than the set floor price, the price
paid by KPN is the floor price.
More information:
http://www.iabeurope.eu/research-thought-lea-
dership/iab-europe-road-to-programmatic-whi-
te-paper/
PUBLISHER
INVENTORY
FLOOR PRICE
€15
COLGATE
€10
L’OREAL
€12
KPN
€25
IKEA
€13
5.2 SUPPLY STRATEGIES.
There are various ways in which
publishers can offer their available video
inventory to the market. For instance, the
publisher can decide to sign a direct deal
with an advertiser, or they may offer their
inventory via a Supply Side Platform (SSP)
for programmatic buying. Either of the
following two systems may be used to
offer video ads: the ad server
and the SSP.
PREMIUM AD SERVER
The publisher uses an ad server to serve his direct
deals with the advertiseror the media agency.
Apart from these closed direct deals, the publisher
may alsochoose to sell the rest of his inventory
via a commercial network. These network have a
lower yield than direct deals and they do not offer
a minimum guaranteed offtake, so it is possible
that the publisher is left with unsold video
inventory.
PREMIUM AD SERVER LINKED TO SUPPLY SIDE
PLATFORM
Publishers display theirdirect deals via their
premium ad server. Any leftover inventory will be
made available in the SSPso that it can be sold to
advertisers via the auction. This way publishers
are guaranteed to meet the goals of theirdirect
deals (depending of course on the targeting
preferences).
In this scenario, publisher rule out that certain
consumers are more valuable for an advertiser
than others. It is possible that an ad is served to a
consumer via a direct deal that could have had a
higher yield via the programmatic auction.
The result is that publishers may not get the
highest yield out of their available inventory.
WINNER!
PRICE: €15,01

SUPPLY SIDE PLATFORM LINKED TO PREMIUM
AD SERVER
In this scenario the video ad is initially send to the
SSP. The publisher has defined only private
exchange places in the SSP, with a higher floor
price than theirdirect, non-programmatic
campaigns.
This elevated price is justified by the fact that, by
using data, the biddercan select the consumer
that meets his target audience criteria the best.
When noone in this private exchange shows
interest, the inventory is offered via the premium
ad server. When the inventory is not sold via the
premium ad servereither, the publisher may
decide tooffer the inventory in the SSP’s open
exchange.
It is important to have a clear strategy when
selling inventory this way. Selling too much
inventory via the SSP may affect the deployment
of impressions of yourdirect deal campaigns.
SUPPLY SIDE PLATFORM
(HOLISTIC AD SERVING)
The entire video ad inventory is offered in the SSP.
Both direct deals and programmatic deals are
facilitated via the SSP. The direct deals take part in
the bidding as well. To respect the agreements of
the direct deal, it is possible to guarantee full
deployment by prioritizing and using the right
settings.
Using this holistic way of selling inventory, the
publisher has the opportunity to yield the highest
price per video ad, given theirdirect deals are on
schedule.

6 THE FUTURE:
A DIVIDE
BETWEEN
TELEVISION AND
ONLINE?
Consumersusemoreandmoreplatformsto
watchmediaandvideocontent.Thisbecomes
apparentwhencomparingmediabehaviour
thenandnow.

Where in the past advertisers only needed
television to reach their audience, this is no longer
sufficient. Thanks toonline tech innovations, more
and more platforms support television and online
content. What is more, the consumer increasingly
takes the lead in deciding when and what to
watch. To reach the same target audiences, the
advertiser will have to familiarize himself with the
different possibilities and restrictions posed by
the various platforms and devices. It is becoming
easier toclosely pinpoint your target audience via
online platforms. The question remains how
advertisers, publishers and online tech providers
should anticipate on these new developments.
DATA FROM THE MARKET
The shift in consumer behaviour and the digitaliza-
tion of content is in full swing. Both developments
offer a wide range of opportunities and challenges
for the video advertising market place.
BROAD-
CAST TV
BROADCAST
TV
CABLE TV
BROADCAST TV
CABLE TV
VOD
TIMESHIFTING
MULTIMEDIA DEVICE
MOBILE
INTERNET
SMART TV
BROADCAST TV
VIDEO ON
DEMAND (VOD)
TIMESHIFTING
CABLE TV
Inception of TV Present day
Source:SpotXAProgrammaticTVGuideforSellers,2015

“Both in the market and in De Persgroep we notice
a dramatic increase in online video consumption.
Consumers embrace video content and advertisers
respond en masse. The attention factor is very
important. Better video content tends to have a
bigger effect.
This is noticeable in the world of branded content as
well. The quality of the content is directly related to
the attention given to your product. This is why De
Persgroep will expand its video production capacity.
Willem-Albert Bol, Persgroep
“ Opportunity: TMG will launch two OTT platforms early 2017,
enabling us to anticipate on the changing needs of consumers to
watch news and sports. We will incorporate live streaming
and on demand.
Challenge: the segmentation of media consumption remains
a trend and this definitely applies to video consumption as
well. Organic growth of reach and impressions is essential.
Video advertising is not yet a commodity in the programmatic
advertising market place, so the monetization is less effective
and the cost of sale is higher than with display advertising.
Melanie Raupp, TMG

“In the next few years, video will be the most important
growth factor in deciding online advertising budgets. Euro-
pean budgets showed a sharp increase of more than 35%.
Video is especially popular among Millennials, it is the most
effective way to reach an increasingly mobile audience and it
is the first step to move budgets from TV to online.
Video is an important growth factor for the turnover of
publishers, and will play a prominent part in their advertising
portfolio. In order to maximize the turnover potential,
publishers will need to holistically monetize their video
inventory. Their video inventory will become transparent and
available for any deal type.
Janneke Niessen, Improve Digital
“Online video offers a wide range of opportunities: specific
reach, impact, interaction, reaching (young) target audiences
on high quality platforms. Clutter and access to videos of high
quality pose the main threats. When high quality content is
available, some operators show no less than 5 or 6 pre-rolls.
This way, the advantages of online video
over television become smaller.
The consumer is no longer tied to a device or distribution
format to consume AV-media but the market cannot yet
provide detailed insights. Research into the reach of online
video is not yet finalized. We only have access to limited
evaluations on reach, contact frequency and cross-device
and combined TV reach.
Menno Westinga, Zigt

“When executed properly, video advertising offers great
possibilities to build an emotional connection
with your target audience.
Gerald Moussault, Cadreon
“By 2017, video will account for 69% of all consumer
internet traffic (Cisco). This poses a challenge to the
existing constructions of all institutionalized media
agencies, but it is also an opportunity for growth.
The production of video content is not necessarily
a costly endeavor. Even smartphones now have the
capacity to shoot content with the potential to go viral.
Combine this with the dramatic growth of the video
advertising market and it becomes obvious that
investing in video will open doors to
new, profitable sources of income.”
Kevin Fox, Blue Billywig

“Concerning online video advertising, our biggest opportunity
is also our biggest challenge: the development of cross-
screen trading. We live in a world where consumers move
from screen to screen (holistic) – mobile, online, TV. The
development of cross-screen trading offers advertisers the
opportunity to plan, track, buy and optimize online ads on
any screen. They must focus on finding the right audience, at
the right moment, using the right format.
Changes will need to be made in order to address the needs
of this cross-screen world. Campaigns will be monitored by
one team, guided by one single platform, and no longer
by multiple teams in silos.
Josh Torok, Tubemogul
“As video becomes less and less lineair, not to mention
served in different formats on different devices, it is essential
for creative parties to provide tailor-made solutions for
online video advertising. Using TVCs in online video ads
is a missed opportunity.
Factors and features such as device, content platform, inter-
active pre-rolls, immersive 360 video experiences, likeable
video snacks and feature video content should already be
considered during the planning phase. Video advertising
should be seen as separate content and will only be taken
seriously when it fits seamlessly in the online media experi-
ence. This poses challenges and opportunities for
creative parties and brands. ”
Nomkwazi Hooplot, Weborama

“More than ever, advertisers are encouraged
to produce good, relevant and fun pre-rolls.
One that meets the profile of the consumer,
but also adds to his daily activities and even
the weather.
This makes pre-rolls relevant, resulting in
more views, a wider reach and you need less
pre-rolls to achieve the same goals. The icing
on the cake? Pre-rolls are received more
positively as well.
Immanuël Kranendonk, Ster
“While static ads are struggling, video is
booming on mobile devices. Programmatic
video enables advertisers to tune their mes-
sage accordingly to specific users, specific
moments and specific devices.
Elwin Gastelaars - SpotX
Advertisers are quickly learning their way
around video advertising. They demand
more qualitative reach, insights in media
and more professional content, preferably
broadcasters inventory. With the right tools,
media agencies and publishers can meet
their demands.
Tom van Halteren - Videology

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IAB Netherlands Online Video Handbook 2016

IAB Netherlands Online Video Handbook 2016

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IAB Netherlands Online Video Handbook 2016