The future of video is instream

Paul Paul Bannister

In February 2023, Adweek shared the news (note: subscription required) that big changes are coming to how video inventory is classified on the web and how billions of dollars are spent on video advertising. The news caused a buzz throughout the industry, but didn’t catch us by surprise…

This is a project we’ve been working on for months and now that the cat’s out of the bag, we can finally share more about how this upcoming change sets our creators and publishers up for success in a future where high-quality video content is only becoming more and more important.

The short version is that our creators and publishers can continue to pursue the video strategy we’ve been recommending for a while now, and the industry is adapting to further reward quality video content.

The problem with instream vs. outstream video

First, some definitions before we dive in. The upcoming changes have to do with whether ads appear in “outstream” or “instream” video players.

Over the years, the industry has settled on two classifications for video inventory:

  • Instream: Video ads are inserted in video content – think television commercials
  • Outstream: Video ads play without accompanying video content

This binary approach to video inventory created a growing issue for advertisers. Over time, the amount of video on the web has steadily grown, and so has the amount of those video ads labeled as “instream.”

Originally, buyers thought of instream ads as being in true, video-first environments like click-to-play video players, CTV (connected television), and other premium environments.

Over time, instream extended to other video players that run ads between video content, like sticky auto-play video. This makes sense since the ads still play alongside video content, but also have less value to advertisers because the user intent is weaker — the person seeing that video ad didn’t sit down and choose to watch the video.

Advertisers buying “instream” video weren’t sure what they were getting. Was it a click-to-play video player with someone who had chosen to sit down and watch that video? Or a video that automatically started playing without the user necessarily choosing? Advertisers are willing to pay more to reach the former video viewer, but the current specifications don’t provide that info.

An early attempt at a solution: redefine “instream”

It’s critical to make it easy for advertisers to buy ads in experiences they really want.

So the Interactive Advertising Bureau (IAB) Tech Lab started an effort to create more alignment around the definition of instream video. Several ad buyers worked on updating a guidelines document managed by the IAB Tech Lab: the aptly named “AD FORMAT GUIDELINES FOR DIGITAL VIDEO AND CTV.”

In August 2022, the Tech Lab released an update to this document with a fairly major change to the definition of instream — in order for video to be considered “instream,” the player had to have the sound on.

Nearly no video content on the web is “sound on” outside of walled gardens like YouTube, so this would have had massive unintended consequences for the industry.

The old scenario, where 95% of video on the web was classified as instream, wasn’t great. But this new, recommended scenario would end up with 99% of video classified as outstream — also not great.

If this change had been put into practice, it would have devalued publishers’ video content and pushed the web towards an environment that rewarded outstream – just video ads – and limited original video content, which is worse for advertisers, creators and publishers, and internet users alike.

Building a better solution for everyone

Thankfully, the guidelines document wasn’t the last step in the process. Updating the OpenRTB specifications — the document used by every company participating in the programmatic advertising markets — was a critical remaining step.

That’s when we got involved.

Along with a small group of other leading companies within the IAB Tech Lab, we went to work updating the OpenRTB Specifications.

The key objective was to update the specifications to give buyers good information about what they were buying and create incentives for publishers to create higher-quality video experiences.

That’s the way we’ve always thought about video. It shouldn’t just be a way to jam as many video ads as possible, but a way to create value for advertisers, publishers, and viewers.

Our group worked through the process and decided that the two extremes of instream and outstream needed something in the middle – “accompanying instream” to account for cases where ads still appear between pieces of video content, but the video isn’t the primary user purpose (for example, our Playlist video player).

All participants agreed that accompanying instream is a more premium experience than outstream video, even if it’s not as high-quality as true primary instream like click-to-play players.

The OpenRTB Specifications now include three tiers of video:

  • Instream: Video ads are inserted in video content that is the user’s primary reason to visit. This can be sound on or sound off.
  • Accompanying Content: Video ads are inserted in video content, but the video is not the primary reason for the user’s visit.
  • Outstream: Video ads play without accompanying video content.

So what does this mean for you?

This is a huge win for the larger ad ecosystem, particularly for our creators and publishers.

Accompanying instream allows creators and publishers to put their great video content front and center with their audience, gives advertisers access to a large pool of high-quality video ad placements above outstream video, and creates a better experience for users.

For now, not much is changing though.

It will take time for this new specification to be implemented. But once ad tech companies implement the specification, buyers will start spending more money on accompanying instream video, less money on outstream video, and the most money on primary instream video formats.

This is exactly what we’ve been recommending to our creators and publishers:

In the future, outstream video will still have value, but we’ll be working with our creators and publishers to make sure they have original video content in as many situations as possible.

The new IAB Tech Lab specifications are another great example of using our collective power to make positive changes across the industry!