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2016 State of The Industry: Native Outstream Video

Outstream native, often referred to as “in-article” or “in-text”, is a widely traded programmatic video ad format. Despite many challenges, outstream is gaining tremendous momentum within the industry due to the availability of inventory across publishers, networks, and buy-side platforms. And in case you’re new to the format, here’s an overview of where we stand in the Summer and Fall of 2016.

Brands are not sure how to create content for modern video formats

While outstream resembles its older brother pre-roll, it’s unique in the way it’s consumed. Outstream is the staple for mobile, so it’s highly viewable. However, sound is becoming a concern.

If we consider that the typical mobile experience includes listening to music or browsing the web on the way to school or work, this means that most users are consuming ads without sound. Digiday recently stated that up to 85 percent of Facebook video is consumed without audio. Across the wider web, approximately 40-50% of outstream videos are also viewed soundlessly. While we are starting to notice more videos accompanied by subtitles or high impact text, the vast majority of this creative lacks these elements. All things considered, we can see that video creation for the modern web is still in its infancy.

Users don’t mind native outstream

A major concern surrounding outstream was the disruption of user experience. However, the numbers tell a different story. Unlike pre-roll ads that users are forced to watch, outstream ads provide users with a choice to pause the video or scroll down to continue reading. This positive reception, combined with high completion rates and low cost-per-completed views (on par with pre-roll), means that brands are now making a bigger case for outstream.

Just look at this beauty!

Viewability is high but needs more support from verification partners

Outstream had a unique opportunity to create an ecosystem for highly viewable ads. While most sites only load ads that are in-view, we are seeing some early offenders, indicating that you will likely have to work with a viewability partner to make sure your money is spent wisely.

Thankfully, due to the novelty of the format, it’s easy to tie viewability to click-through rates at a basic level. We’ve see that outstream ads loaded in-view yielded five to 10 times higher click-through-rates than their non-viewable counterparts.

Figuring out which format you are buying programmatically is hard

Considering that most platforms still have some undisclosed inventory, it’s no surprise that there are issues surrounding transparency. For companies that only create outstream video, it’s simple. However, for those that support multiple formats, it’s more challenging. Currently, very few exchanges or buy-side platforms that offer both pre-roll and outstream can easily separate the inventory due to the fact that it requires a lot of heavy lifting on their end.

Both pre-roll and outstream have a place in every media plan. However, brands’ ability to choose only the format they are interested in when buying programmatically still requires a lot of improvement.

Lower barriers to entry for brands to be on Tier 1 publishers

Historically, brands could only run video advertising on Tier 1 publishers since only they had video content that could be monetized through pre-roll. Outstream then opened the doors for smaller publishers to monetize their content with video, and in the process, enabled Tier 1 publishers to extend their video inventory. Seeing as these publishers create ample static content, it naturally became a great environment to deliver outstream ads. Now, we are witnessing outstream helping brands to scale video campaigns on Tier 1 publishers of sizes that were traditionally reserved for direct deals.

What’s Next for Outstream?

As seen with native advertising, content creation and transparency remain the largest challenges for brands to adopt modern mobile-first formats. That being said, with these few barriers left to overcome, outstream is showing great promise and can swiftly rise to become the most prominent high performing channel for video advertising.

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