The Polar Report

The Polar Report: Industry Insights #7

February 22, 2022

Welcome to The Polar Report, a curated view of what’s happening in the world of digital Monetisation, Audience Development and Measurement. This week we explore advertising at the Super Bowl, Google’s ‘Topics’, Sky’s ‘Smart Sponsorships’ and more!


YouTube’s ad business delivered $8.63 billion in Q4, leaving Netflix in its wake

Ads on YouTube generated more income than Netflix's global network for the final quarter of 2021, bringing in $8.63 billion in comparison to Netflix's $7.71 billion. Nor does this number include revenue from YouTube Music, YouTube Premium or YouTube TV. That being said, both platforms experienced growth in this period.  

These eye-watering numbers will inevitably stimulate the AVOD vs SVOD debate for studios, content creators and rights holders. More importantly, it’s a sign of advertiser trust being reinvested back into YouTube after a turbulent period.

So what should media companies make of this news?

Traditional production companies continue to seek broadcast’s new golden fleece: a Netflix commission. Adding a YouTube distribution strategy can deliver both engagement and audience metrics used to validate the commission while delivering a new source of revenue.

What the numbers don’t tell us is what type of content is helping to drive that topline advertising revenue for YouTube. We know that YouTube favours long-form and advertisers favour brand suitable content.

Production companies and creators have choices. Become a micro media company on YouTube and rent audiences to provide additional advertising services, take the pay day from Netflix and move onto the next production, or implement a hybrid strategy of AVOD and SVOD to sustain short-term and long-term revenue growth.

Full article on Variety

Audience Development

Sky's 'Smart Sponsorships' brings programmatic targeting to TV

Sky Media has announced a new innovation, bringing their addressable AdSmart technology into the realm of sponsorships. Available in the latter half of 2022, 'Smart Sponsorships' will enable brand sponsorships to utilise different creatives to address audiences, something that sponsorships were previously unable to do.

It will mean that creatives can be swapped out depending on the household that is watching. For example, depending on a household's income or life-stage, they could be shown a different model of car. Sky anticipates that this will improve engagement rates and overall outcomes of campaigns, based on the uplifts in performance seen after they introduced AdSmart in 2014.

The UK market has been a little slow to jump on the Addressable TV bandwagon but it’s products like these that could start to grip advertisers’ interests.

Sponsorships have historically been modelled on the reach and frequency angle, with the same ad being repeated multiple times by owning the real estate directly before and after programs.

This innovation enables brands to still deliver that reach and frequency but in a personalised manner based on the household viewing preferences. This targeting capability is not new to the industry; it's been prevalent in programmatic for years, but bringing it to high value TV programmes could be a game changer for Sky.

Full article on Sky Media

Measurement invests in a Super Bowl ad campaign

B2B company bought a Super Bowl ad placement as part of a large campaign that will be supplemented by social media and OOH advertising. It is a significant investment, with spending ten times more on this campaign than on any they've run before.

Ads played during the Super Bowl have become as notorious as the big game itself, with companies shelling out millions to have a slot amongst the commercials. Viewers tune in from all over the world to watch the latest trailers for the biggest new movies and it's become one of the few times when people pay genuine attention to advertisements. There’s even a YouTube channel dedicated to showing these ads outside of the game, called YouTube AdBlitz.

It’s very rare for a performance driven B2B advertiser to make such a massive commitment to a linear buy. In a world where advertisers pour money into attribution and new modelling techniques, linear buys have often been reserved for brands looking to stay front of mind.

So why do advertisers continue to flock and spend significant ad dollars on the Super Bowl and what value do B2B performance marketers see in this investment?

It falls back to the concept that not all ads are built equal. You can buy the same format on the same platform at the same time of day but the resulting impact on Recall, Favourability and Consideration will always differ.

The Super Bowl’s key ingredient is that audiences are more receptive to being entertained during the game and the breaks. Post-event discussions around the ads have a huge earned media impact. However, like the game itself, there are always winners and losers.

The challenge that many brands face with buying this format is that one advertiser can achieve a larger slice of the social discussion pie. Coinbase appears to have won the battle with the simplest yet most innovative of ads. This can often drown out the impact of the other ads shown during the game.

It’s a massive risk but the payout is also huge. Measuring its success is like any other TV ad: brands will look at lift in sentiment and wider social listening. It’s also very likely has reached the ceiling with views on YouTube so a new home can often be a good way of lifting the same message.

Full article on AdExchanger

Google's Topics solution to cookies - can it deliver?

Google has announced its new solution for ad targeting on the Chrome browser when the third party cookie retires. The new plan, dubbed 'Topics', comes after Google's previous plan 'FLOC' was poorly received by the industry.

Topics will replace cookies by using over 300 different categories that define user interests, such as food, travel, sport, etc. It will then display three of these to a website whenever a user visits. It won't display sensitive identity categories, while also allowing users the opportunity to opt out.

It ultimately comes down to the need to protect user privacy and operate with user consent, which is where the Topics model takes a step in the right direction. It is a far simpler concept to explain compared to FLOC, meaning it will be easier for users to understand what it is they are consenting to and how their data is used. Yet Topics is not without faults, and quite substantial ones at that.

While its simplicity has benefits for user consent, this simplicity far reduces the ability to target ads. This is of course a concern for marketers and advertisers, whose options for delivering personalised campaigns may be severely reduced in comparison to current capabilities. That it only draws user signals from Chrome creates a limited view of user behaviour. As such, it seems likely that publishers will be reluctant to use Google’s offering and will instead turn more to first-party solutions.

While it may be easy to feel pessimistic about Topics, we are yet to see it fully realised. It may yet surprise us. We hope that Google takes the industry's feedback on board and develops Topics into a solution that is beneficial for all.

Full article on Advertising Age