1. A Forrester Consulting
Thought Leadership Paper
Commissioned By Teads
June 2015
Solving Digital Video
Advertising’s Premium
Dilemma

2. Table Of Contents
Executive Summary....................................................................................... 1
Digital Video Advertising Is Primed For Growth.......................................... 2
Buyers Need More From Video Inventory.................................................... 3
Ensure The Future Of Video Ads By Addressing The Quality Supply
Problem........................................................................................................... 6
Key Recommendations ................................................................................. 8
Appendix A: Methodology............................................................................. 9
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3. 1
Executive Summary
Digital video advertising represents a golden opportunity for
advertisers, agencies, and media companies alike — but
the opportunity depends on resolving a few key challenges
facing the market today. Ultimately, both buy- and sell-side
firms have a role to play in determining the future success of
this important advertising format.
In January 2015, Teads commissioned Forrester Consulting
to evaluate how advertisers, agencies, and publishers are
adapting to new trends in video advertising. Then to further
explore this trend, Forrester developed a hypothesis that
tested the assertion that advertisers, agencies, and media
companies are seeking alternative approaches to traditional
digital video advertising because of the challenges
associated with limited video inventory.
In conducting a survey with 529 decision-makers
representing advertisers, agencies, and media companies
in Argentina, France, Germany, Italy, Mexico, Spain, the UK
and the US, as well as six qualitative interviews, Forrester
found that both buy- and sell-side companies are bullish on
digital video advertising’s future; however, challenges hold
advertisers and media companies back from fully pursuing
digital video advertising solutions. These challenges include
defining premium video inventory, dealing with the
availability and lack of premium inventory, and assuring
digital video advertising performance.
KEY FINDINGS
Forrester’s study yielded five key findings:
› All market participants expect digital video spend to
increase in the next two years. Video ads represent an
opportunity for advertisers to reach customers with rich,
engaging messages about their brands and products. For
agencies, it represents higher fees and the opportunity to
work on exciting ad content, and for media companies, it
represents a significant revenue opportunity.
› Lack of premium inventory — and disagreements
about the definition of premium — hold back video’s
growth. To avoid the worst of fraud and poor viewability,
advertisers and agencies default to “premium” inventory.
This drastically reduces the ad opportunities available and
muddies the market with differing criteria for what qualifies
as “premium.”
› Video is still a work in progress to fulfill its promise.
Beyond simply wanting more premium inventory,
advertisers and agencies want better targeting and
measurement of their video ads’ impact. Media
companies, on the other hand, struggle with the costs of
video content and the ability of their sales force to sell it
effectively.
› Advertisers, agencies, and media companies must
build an accountable, transparent video ad market. As
an emerging ad format, online video lacks the foundation
of agreed-upon standards and practices other media
enjoy. For their part, media companies that can deliver
high-quality real estate, backed by assurances on
performance, will be poised to deliver truly premium video
ad inventory that will provide the confidence buyers are
seeking. Buyers who then expand their definition beyond
known and trusted media brands and embrace media
companies that offer transparent and accountable
measurement will benefit from more effective campaigns.
› Outstream advertising offers one solution to these
challenges. While video content is a natural place for
video ads, both the buy and sell side noted that video ads
that appear within editorial content offer advantages.
Media companies told us that outstream ads enable them
to offer more premium video inventory and drive solid
return on investment. Buy-side firms told us that
outstream helps alleviate concerns around viewability,
enables them to buy programmatically, and delivers a
positive end-user experience.

4. 2
Digital Video Advertising Is Primed
For Growth
Digital video advertising is a dream format for everyone
involved. For advertisers, it represents the opportunity to
reach customers and prospects with rich, engaging content
across screens. For media companies, video delivers higher
cost per thousands (CPMs), and for agencies, it provides an
opportunity to earn more on fees and work on more exciting
content. Coupled with consumers’ increasing reliance on
digital video overall, these enticements help explain why so
many advertisers and agencies expect the digital video ad
market to grow in the next two years (see Figure 1).
This growth is dependent on a number of factors, including
greater availability of premium video inventory (which 46%
of agencies we surveyed indicated as a driver of online
video ads’ growth — the top option chosen), improving
standards around targeting and ad viewability, and,
especially for advertisers, evolving consumer trends toward
time spent consuming online video content (61% of
advertisers cited this as a crucial driver of online video
spend in our study).
Media companies have sensed that online video represents
a major opportunity for them as well, with 73% predicting
they will either moderately or significantly increase their
volume of video ad inventory in the same two-year
timeframe. Media companies are driven by the lure of higher
CPMs on video inventory, with 44% citing it as the main
benefit of the format, but 29% of media companies also see
video as a chance to deliver more engaging content to their
audiences (see Figure 2).
Both buy-side and sell-side firms are bullish on the future of
online video; however, there are also challenges that must
be identified and overcome — it’s critical that the market
doesn’t let drivers become inhibitors.
“I think [the amount of video inventory] will keep
increasing because consumers like to consume
video for either entertainment or information, and
[video] is probably the easiest or the best way to do
that. So I think there's in general a consumer
demand for it, and on the other hand, it is the most
impactful way to bring messages across.”
— President at a global advertising agency
FIGURE 1
Video Ad Budgets Expected To Increase In Two Years
Base: 108 agencies and 285 advertisers in Argentina, France, Germany, Italy, Mexico, Spain, the UK, and the US
Source: A commissioned study conducted by Forrester Consulting on behalf of Teads, May 2015
Significantly increase
Moderately increase
Stay the same
Moderately decrease
Significantly decrease
31%
39%
12%
8%
10%
Significantly increase
Moderately increase
Stay the same
Moderately decrease
Significantly decrease
25%
52%
15%
7%
1%
“How do you think your spend on digital video
advertising will change in the next two years?”
“How do you think your clients’ spend on digital
video advertising will change in the next two years?”
Agencies Advertisers
70% of agencies and 77% of advertisers expect
video budgets to increase in the next two years.

5. 3
“[Video ads] show us how to be
innovative, how to beat our
competitors. It lets us do something
different and be ahead of the times.”
— Advertising manager at a European media company
Buyers Need More From Video
Inventory
Buy-side participants are largely in agreement on the factors
that threaten their spend in online video — and interestingly,
many of these threats are the mirror image of those that
buy-side firms identify as crucial drivers (see Figure 3). Buy-
side firms worry that lacking standards around targeting,
measurement, implementation, and best practices will hurt
the market in the future, along with pressures on the
availability of premium video inventory.
For media companies that offer online video today, the
challenges facing digital video’s future are mainly focused
on delivering inventory in a way that makes sense for them
(see Figure 4). For one, media companies must balance the
value of video’s CPMs against the costs associated with
“becoming a video content producer,” which can be
prohibitive.
FIGURE 2
Media Companies Are Driven By Video’s Unique
Enticements
Base: 136 publishers/media companies in Argentina, France, Germany,
Italy, Mexico, Spain, the UK, and the US
Source: A commissioned study conducted by Forrester Consulting on
behalf of Teads, April 2015
Opportunity for higher CPMs
Opportunity to provide
more engaging advertising
content to our audience
Opportunity to draw
budget from traditionally
nondigital ad budgets
Earning revenue off
audiences that brands
may not reach via TV
44%
29%
19%
7%
“What is the main benefit of video
advertising for your organization?”
Buyers in North America (85% of advertisers
and 79% of agencies) were most likely to
expect increases in spend for online video,
whereas media companies in the EU (80%)
were most likely to predict an increase in video
inventory over the next two years.
FIGURE 3
Agencies And Clients Are In Step On Threats To
Video Ad Spend Growth
Base: 108 agencies and 285 advertisers in Argentina, France, Germany,
Italy, Mexico, Spain, the UK, and the US
Source: A commissioned study conducted by Forrester Consulting on
behalf of Teads, May 2015
Lack of verification that
the ads were delivered
to the intended audience
50%
46%
Lack of established standards
around measurement
43%
36%
Lack of established standards
around implementation best
practices
42%
33%
Lack of premium
video inventory
40%
27%
Lack of established standards
around ad viewability
37%
35%
Agencies
Advertisers
“Which of the following factors do you think will
inhibit adoption or spend in digital video?”

6. 4
In addition to dealing with the costs of producing video
content, over one-third of media companies have also
struggled with getting their sales force up to speed on how
to sell video ads, as lack of familiarity with cost-per-view
(CPV) models has emerged as a challenge.
Another issue is a lack of agreement around what exactly
constitutes premium video inventory. The quality of the
media brand and content is an important consideration for
all, but media companies ranked viewability more highly on
their list of considerations than their buy-side counterparts,
and they also focus more heavily on the end user
experience. Agencies and advertisers both ranked the
quality of data supplied for targeting as their third most
important consideration, while media companies ranked
targeting as only their sixth most important consideration
(see Figure 5).
“How do we define premium? This is
not easy to answer. Realistically,
everyone has their own
methodology.”
— CEO of a global advertising agency
FIGURE 4
Media Companies Struggle With Costs, Focus,
Lack Of Inventory
Base: 103 publishing/media companies in Argentina, France, Germany,
Italy, Mexico, Spain, the UK, and the US
Source: A commissioned study conducted by Forrester Consulting on
behalf of Teads, May 2015
The ROI is not as high as we would
like due to costs of producing
video content to host the ads
44%
Video is too small a part of our
overall revenues to dedicate sales
or traffic manager resources to it
40%
We don’t have
enough video inventory 37%
Our sales force lacks
familiarity with CPV models 34%
“You mentioned your company currently offers video
advertising. Which of the following challenges have
you experienced with selling video ads today?”
For media companies that are “digital native”
or have video as part of their existing content,
lack of video inventory was the key challenge
(47%). Non-native video media companies were
most concerned that ROI (balancing costs and
returns) of video content would not make
sense for their business (45%).

7. 5
When buy-side firms run up against these challenges with
executing video ad buys, they report a host of negative
outcomes, including foregoing open programmatic buys for
direct buying or private marketplaces and abandoning digital
video ad buys altogether (see Figure 6).
The pattern is similar for media companies as well. Over
half stated they had favored custom executions over
programmatic approaches to selling video content or had
held back pursuing video ads as heavily as they otherwise
would.
These behaviors result in lost opportunities that affect
everyone — lost opportunities for advertisers to reach their
customers or prospects with rich, engaging content; lost
opportunities for agencies to earn on commissions and work
on engaging material; and lost opportunities for media
companies to earn revenue off of more valuable video
inventory.
FIGURE 6
Unaddressed Challenges Cause Buyers To Opt Out
Base: 103 advertising agencies companies and 281 advertisers in
Argentina, France, Germany, Italy, Mexico, Spain, the UK, and the US
Source: A commissioned study conducted by Forrester Consulting on
behalf of Teads, May 2015
“Only bought video selectively through
manual buying or private marketplaces”
“Decided to repurpose existing
video assets rather than produce
specific online content”
“Decided not to pursue
digital video campaigns”
“Sought out other opportunities or
formats for digital video content”
“What impact have these challenges had on
your/your clients’ approach to video advertising?”
Agencies
Advertisers
57%
52%
38%
31%
55%
41%
35%
34%
FIGURE 5
Buy-Side, Sell-Side Firms Define “Premium Video Inventory” Differently
Base: 529 publishing/media companies, agencies, and advertisers in Argentina, France, Germany, Italy, Mexico, Spain, the UK, and the US
Source: A commissioned study conducted by Forrester Consulting on behalf of Teads, May 2015
“Of the following, which three do you take into consideration
when determining if video ad inventory is premium?”
Advertisers
Agencies
Media Cos.
Rank 1:
Quality of the
editorial content
(44%)
Rank 2:
Quality of the
media brand
(37%)
Rank 3:
Quality of data
supplied for targeting
(36%)
Rank 4:
Viewability
of the ad
(35%)
Rank 1:
Quality of the
media brand
(39%)
Rank 2:
Quality of the
editorial content
(38%)
Rank 3:
Quality of data
supplied for targeting
(38%)
Rank 4:
Placement
of the ad
(35%)
Rank 1:
Quality of the
editorial content
(63%)
Rank 2:
Viewability
of the ad
(58%)
Rank 3:
Quality of the
media brand
(57%)
Rank 4:
Ad end user
experience
(46%)

8. 6
Ensure The Future Of Video Ads By
Addressing The Quality Supply
Problem
To help drive the digital video opportunity, many buy- and
sell-side firms are opening themselves to additional sources
of premium video inventory, including outstream advertising,
which places video ads in the heart of written editorial
content, rather than depending on native video content to
host the ad (see Figure 7).
Buy-side firms that have adopted outstream advertising
reported that it helps address some of their concerns
around online video — 70% of advertisers said it opened up
more inventory and allowed them to buy video
programmatically, 69% reported it helped them with
determining viewability, and 65% felt it drove a positive end
user experience, thereby avoiding potential backlash from
consumers as their brands are associated with an annoying
video ad experience.
Media companies reported that outstream has indeed
relieved pressures on producing video inventory for their
buyers. Among media companies that have offered
outstream video, over 60% stated it has enabled them to
offer premium video inventory and has opened them up to
selling programmatically. Additionally, more than half stated
it provides better return on investment (ROI) compared with
other ad formats, which is partially explained by the lowering
costs of native video production (see Figure 8).
Ultimately, advertisers and agencies want more assurances
they’re actually reaching their audiences, and they want
better standards on viewability and measurement so they
know their valuable video dollars are paying off. While some
of the solution here rests with media companies devoting
themselves to transparency, the industry as a whole is
seeking stronger, more clearly worded standards — a
responsibility ultimately shared by companies representing
both the buy and sell side of the video ad market.
For their part, media companies told us they were looking
for lower-risk opportunities to get off the sidelines or go
FIGURE 7
Buy- And Sell-Side Firms Seek To Diversify Their
Video Ad Mix
Base: 529 publishing/media companies, agencies, and advertisers in
Argentina, France, Germany, Italy, Mexico, Spain, the UK, and the US
Source: A commissioned study conducted by Forrester Consulting on
behalf of Teads, May 2015
Outstream
ads
77%
70%
69%
Instream
video ads
60%
60%
72%
Banner
video ads
59%
65%
54%
Agencies
Advertisers
Publishing/
media
“In the future, how important will the following video ads
be to your clients’ overall advertising portfolio?”
(Showing “more/much more important than today”)
Eighty-five percent of agencies and 82% of
advertisers in North America believe outstream
advertising will be a more important part of
their media mix in the future. Media companies
in Latin America (81%) are most likely to see
outstream becoming more important, followed
by 67% of media companies in the EU and 63%
of media companies in the US.
FIGURE 8
Outstream Advertising Has Made It Easier For
Media Companies To Offer Video Inventory
Base: 86 publishing/media companies in Argentina, France, Germany,
Italy, Mexico, Spain, the UK, and the US
Source: A commissioned study conducted by Forrester Consulting on
behalf of Teads, May 2015
More inventory means we
are able to execute video
sales programmatically
67%
It lets us offer additional premium
inventory for video ad content
66%
It provides a better (less obtrusive)
end user experience than
other digital video advertising
60%
It delivers better ROI than
other ad formats
59%
“How strongly would you agree or disagree with the
following statements about the outstream video you
offer your clients?”
(Showing “agree” or “strongly agree”)

9. 7
deeper into the video advertising opportunity. As they do so,
they need to bear in mind that video is a costly proposition
for their buy-side clients as well. Therefore, they must
devote themselves to effective means for targeting, as well
as transparency in viewability and performance to instill
confidence in their buyers that their investment has found a
safe home.
“Premium does not have to be costly, but it must
provide a guarantee of transparency and how to
manage what clients want (through transparency).”
— CEO at a global advertising agency

10. 8
Key Recommendations
The video advertising market can and should be a boon to advertisers, agencies, and media companies as it evolves
and matures. That said, there remains significant room for improvement to ensure this opportunity makes sense for
everyone involved. Buy- and sell-side firms can contribute to the success of online video ads by:
› Buy-side: Demanding clarity on the tough questions. It is incumbent on buy-side firms to demand
accountability for their digital video advertising buys. Prioritizing buys that help address questions around
effective targeting, setting high standards for viewability, requiring accountability on performance, and bearing in
mind the experience of your customer will show that solutions that can address these questions will be valued
more highly and influence your sell-side partners to focus on delivering to your needs.
› Sell-side: Understanding that you can be a video ad provider without necessarily being a video content
producer. Using video ad formats that don’t depend on living within existing video assets are a way to expand (or
create) a media property’s available video inventory with lower cost and risk than having to create ample video
assets to meet advertiser demand. Realize, however, that buyers’ expectations for accountability are rising, and
choose solutions that provide accountability and a positive end user experience.
› Sell-side: Finding technology partners that can help you get off the sidelines. Media companies have been
held back from pursuing video advertising (either at all or as heavily as they may like), due to the hurdles of cost,
time, and employee skills that are in front of them. Look to technology partners to help cut these hurdles down to
size through powerful capabilities but also a robust service layer to support your first steps.
› Everyone: Understanding that premium ad real estate is about more than just the neighborhood. It’s only
natural to consider the reputation and quality of the media brand as an important aspect of defining premium
inventory, which is agencies’ first consideration in driving the future growth of online video. However, both buy-
and sell-side players should embed performance and end user considerations into their equations for defining
which inventory to classify as premium.

11. 9
Appendix A: Methodology
In this study, Forrester or conducted an online survey of 529 advertisers, agencies and media companies Argentina, France,
Germany, Italy, Mexico, Spain, UK, and the US. It then supplemented the survey findings with 6 qualitative interviews. The
study evaluated the current state, benefits of, and challenges and solutions to online video advertising. Survey participants
included decision-makers involved in video buying or selling at their respective companies. Questions provided to the
participants asked about their current video advertising buying or selling practices. Respondents were offered a small
incentive as a thank you for time spent on the survey. The study began in January 2015 and was completed in May 2015.