Publisher Adoption for New Video Ad Specs Lags 6 Months After Introduction

New video ad classifications introduced this March—designed to bring more transparency to what advertisers are buying—are struggling to take hold among publishers, partly due to the ever-increasing list of publisher priorities and fears of impacts to revenue. The Interactive Advertising Bureau (IAB) Tech Lab last August threw its weight behind video inventory transparency. After receiving feedback that the new guidelines could deflate publisher and video vendor revenues—more than 90% of what had been considered lucrative in-stream video would have been reclassified as the less valuable out-stream video—the IAB Tech Lab released a revised taxonomy in March. Since then, the trade group, and others, have encouraged the industry to adopt the updated four classes of inventory. Nearly six months later, those efforts to bring clarity to digital video buying remain more concept than reality, nine sell-side sources told Adweek. The Trade Desk Embraces New IAB Video Specs, Spurring Adoption and Anxiety Two large supply-side platforms (SSPs), which requested anonymity to discuss sensitive industry dynamics, said between 20% and 30% of their publishers had adopted the new classifications. When the protocols were first introduced, analysts suggested publishers might adopt them by the end of the second quarter. Publishers are lagging for a variety of reasons, including the lack of financial incentives, a firm deadline and—at times—support from SSPs, according to sell-side sources. Underlying this protracted adoption is a lack of clarity as to who is responsible for making sure the new standards are adopted and enforced. SSPs and publishers are both, to some extent, waiting on each other to embrace the standards in earnest. “It’s clear that [publishers] are misclassified and that we need to enforce,” an SSP executive told Adweek. Earlier this year, The Trade Desk assumed the unofficial role of enforcing the new protocol, but it has not yet given any public timeline or plan for enforcement, according to vp of inventory development Will Doherty. Doherty added it has been encouraged by the pace of publisher adoption, though wouldn't share compliance figures. Two smaller SSPs told Adweek they had 65% and near-total compliance among their publishers. Many sources said they were sure that the industry would fully embrace the new classifications eventually, despite an unclear timeline. Meanwhile, media buyers are growing increasingly tired of the low-quality online video available programmatically, including rampant sound-off, obscured and irrelevant placements, and many are now eschewing the open exchange altogether. Publishers lack stick or carrot to adopt new classifications Publishers largely recognize the value of the updated video classifications, as improved transparency could encourage more investment. But a number of factors are discouraging them from implementing the new protocol, according to sell-side sources. For instance, there is no explicit financial incentive—such as increased demand or higher CPMs—to pass the correct bid signals, according to an executive at an ad-management firm. If we move now, we lose bid density. There is a revenue impactAnonymous exec at a publisher There is also no explicit penalty for passing the outdated signals, as DSPs, including The Trade Desk, still respect the non-compliant declarations, according to a publishing executive. Additionally, there is no clear deadline for when compliance will be required, deflating any sense of urgency. While there are few factors incentivizing publishers to adopt the standards, there are ample factors discouraging them from doing so. The primary concern is that publishers’ ad revenues could drop if they have to reclassify what was formerly considered in-stream inventory as accompanying content or out-stream, which net lower CPMs. Publishers who have adopted the new signals have not seen a significant drop-off in their revenues, according to multiple supply-side sources, but no one can predict how spend will behave following widespread adoption. YouTube Ad Buyers Unknowingly Targeted Kids Despite Requests to Avoid This disparity in CPMs also means that a publisher that has accurately reclassified its in-stream inventory as out-stream could fetch a lower CPM than a publisher misclassifying the same piece of inventory as in-stream. In another instance, a publisher that has updated its tech stack to allow it to pass the updated signals has continued passing outdated data for fear that its SSP partners might be unable to recognize the new signals, jeopardizing its bid. “If we move now, we lose bid density. There is a revenue impact,” an executive at the publisher said. “We are ready technically to make the change.” Enforcement questions further stymie adoption Similar to the concerns facing digital video quality more broadly, the rollout of the new video taxonomy has posed fresh challenges for SSPs looking to comply with the protocol. For example, if a publisher classifies its video inventory using both the old and new specifications, it could send a bid request classifying a video as both in-stream by the old parameter and out-stream by the new, said one supply side executive. In these cases, it is up to either the SSP or the DSP to figure out how to interpret the bid request. Publishers who have yet to adopt the new protocol pose an even thornier challenge for SSPs. At PubMatic, an inventory quality team receives reports on the publishers with the highest volume of in-stream placements and spot-checks whether they are complying with the new standards, which can be effective at weeding out offenders, according to Kyle Dozeman, chief revenue officer, Americas at PubMatic. CTV Buyers Are Still Struggling to Know Where Their Ads Ran To help enforce compliance, The Trade Desk employs a media quality team that aims to find publishers out of compliance with the IAB standards and notify the SSPs that work with them, according to three SSPs. The Trade Desk declined to comment on its process for verifying publisher compliance. Currently, the primary hurdle is getting publishers to send the new specifications in the bidstream at all. Once they do, the next challenge will be to create a system to determine whether they are correctly labeling their inventory. It is unlikely that any ad-tech firm will regularly audit compliance, meaning that publishers might be in the position of grading their own homework, according to sources. Verification firms could provide the service, though they would need to introduce a tailored solution to do so. “They wouldn’t ever say it’s an SSP’s responsibility to make sure the taxonomy is being used correctly,” one SSP executive told Adweek. This article was updated to clarify that the IAB Tech Lab created the new video specifications.