IAB Tech Lab’s Controversial Definition of Instream Advertising

In August 2022 the IAB Tech Lab re-defined instream and outstream advertising, resulting in a large amount of what would previously have been known as ‘instream’ ads being referred to as ‘outstream’ instead.

The change caused a large splash and generated sufficient controversy for it to be significantly tweaked in March 2023. While placating the most intense criticisms, the 2023 changes were far from a complete walk-back and the initial issues still abound.

We’re taking a dive into what the changes are and how they’re impacting the industry. We’ll be unpacking the criticisms and, as digital advertising providers ourselves, providing our proposed solutions to find a healthier middle ground.

RE-DEFINING INSTREAM ADVERTISING

Prior to the IAB Tech Lab’s intervention, the accepted definition of ‘instream advertising’ was created by the OpenRTB (Real Time Bidding) project.

“[Instream advertising is] played before, during, or after the streaming video content that the consumer has requested.”

Where IAB Tech Lab saw an issue was in the gray areas created by the vague language. The OpenRTB definition doesn’t lay out what is meant by ‘requested’, nor does it specify any criteria for a video’s relevance to the viewer.

IAB Tech Lab determined that creates an unfair bare-minimum threshold for advertising to be labeled as ‘instream’ rather than ‘outstream’, allowing for disproportionately high costs to be charged as instream advertising inventory is seen as more engaging and, therefore, more valuable. According to IAB Tech Lab, advertisements placed in environments labeled as instream command ‘up to 50 percent higher bid prices in today’s market and significantly increasing the resulting revenue’.

In August 2022, IAB Tech Lab made their first change to the definition: Instream advertising must be sound-on when the video player starts. The reasoning behind the change was that video that’s ‘requested’ (see the original OpenRTB definition) is often audible. Therefore, the criteria for instream advertising is made stricter, the gray area is shrunk, and ‘instream advertising’ is more fairly defined.

A heated debate followed in the coming months, not least because under the August 2022 redefinition, less than 10% of online video would be eligible to be called ‘instream’. Other issues involved Chrome’s auto-muting and disproportionate benefit to YouTube advertisers.

IAB Tech Lab’s tweaks in March 2023 maintained the spirit of the initial radical change with a list of concessions, the most noteworthy being that instream advertising must either be sound-on by default or, where that isn’t possible, the viewer must have an ‘explicit demonstrated intent to watch the video’.

While a step in the right direction, the tweak still poses problems.

WHY PROBLEMS PERSIST

While the ‘explicit, demonstrated intent’ criterion in their March 2023 amendment helps solve the issue of Chrome muting videos by default, there’s still too much emphasis being placed on video audibility in the first place.

According to a study by Verizon Media, 69% of people view video with sound off in public spaces and 25% do so even in private places. The issue of audibility, then, extends further than Chrome’s auto-muting.

There’s also a murkiness surrounding what defines ‘explicit, demonstrated intent’ – whether or not audio is on is measurable, yet despite that, what constitutes ‘explicit intent’ is left up for interpretation. Instead, quality, attention, and relevance should be – but aren’t – the main factors of consideration.

This poses a problem where giants such as YouTube, who have claimed that 96% of viewers watch their videos with the sound on, continue to disproportionately benefit from the audibility clause that makes their ad inventory ‘instream’.

Meanwhile, smaller publishers and platforms will have a tough time wrestling with the insufficiently defined clause on ‘explicit intent’. These smaller publishers, especially independent ones, cannot qualify for the top-tier instream classification under this new definition. The platforms are where journalistic content thrives – which is often the content that captures the most deep-seated engagement. Freezing them out from the lucrative instream advertising label not only negatively impacts publishers but also users who won’t be exposed to that relevant and engaging content.

A PROPOSAL: SPLITTING INSTREAM INTO TWO

Any taxonomy or structure we move ahead with now must be both simple and refined enough to reflect the reality of user behaviors. In essence, the true value of a video ad should be measured in how attuned it is to audience interests and preferences. By dividing the current category of ‘instream advertising’, less of the industry will be unfairly locked out of the definition and more clarity can be enjoyed.

Our proposed category of long primary instream video advertising refers to lean-back scenarios with TV or TV-like digital video entertainment, with a focus on long-form content.

Short primary instream, meanwhile, refers to web surfing scenarios with consumers dipping into multiple different short-form videos on different channels. Here, intelligent adtech such as ShowHeroes SemanticHero can serve video advertising content that’s relevant to the videos it precedes, plays during, or plays after in a seamless way.

In short, primary instream advertising in particular, the intent to scroll through a page’s content is akin to the intention to view ads that are relevant to that page’s content – something that the IAB Tech Lab’s definition of instream advertising, as it currently stands, doesn’t explicitly allow for.

Our proposed split allows for less emphasis to be placed on audibility and opens instream advertising back up to publishers and platforms who use intelligent, privacy-protecting adtech to provide relevant content to users.

As ShowHeroes Group CEO Ilhan Zengin put it in his piece on the topic for AdvertisingWeek: “Instream categories alone cannot make the difference here; but allowing a greater breadth of definition will allow brands to better support the kind of world-class user experience that should be our signature in a new age of ad tech.”