Video player Teads aims to outdo YouTube with sophistication

TOKYO - Teads, which is focused on offering advertisers premium ‘outstream’ online video inventory, last month hired its first regional SVP, Christian Guinot, and a new MD for Japan, Yukihiko Imamura. Guinot was formerly at MEC China, and Imamura at Kenshoo. The company also secured US$47 million in debt financing, which it plans to invest in Asian expansion.
  
Pierre Chappaz, the company’s executive chairman, said Teads is exploring acquisitions in the region with a view to offering more sophisticated services. In Japan, he wants to move things to “the next level”. Teads entered Asia via Japan two years ago and has since built up a level of reach comparable to YouTube, according to ComScore. Chappaz said he aims to overtake the Google-owned platform in the near future. The immediate focus outside Japan will be on Southeast Asia, with a China launch slated for next year.

Imamura said that Teads sees the balance shifting in online video from direct response to branding in Japan. At the same time, he said marketers in Japan are still “very cautious” compared to their counterparts in the US and Europe when it comes to investing in video. The hesitancy comes largely from concerns around placement and lack of quality inventory, he said.

Teads differentiates itself from platforms such as YouTube or Nico Nico Douga by giving advertisers full transparency in terms of where their video will appear. The company works with around 140 premium publishers in Japan and offers a variety of formats for video within online content, including vertical. It aims to offer a less intrusive form of video advertising than pre-roll, and only charges advertisers for views of more than 15 seconds on mobile and 30 seconds on desktop. Advertisers in Japan include Sony, Lexus, ANA and JAL as well as international brands.

The average viewership of skippable pre-roll advertising is around two seconds. Chappaz said the rise of ad blocking was a natural reaction to being forced to watch unwelcome promotional content. “It’s a strong message users are giving to the industry: don’t destroy our experience, or we will protect ourselves. It would be good if advertisers listen to the message.”

Chappaz was unable to give an average for the number of people who watch Teads videos beyond 15 or 30 seconds, but said it was “high enough to make the system work”.

At the same time, he said, most brands still tend to transfer existing TVCs to the video format rather than creating original video content. He expects that to change with the growth of mobile, which accounts for 60 percent of Teads’ inventory.

“It’s the very beginning,” Chappaz said. “Marketers are aware that audiences are on smartphones and that they can’t continue to operate as if everyone is on TV, but it takes a bit of time to react to market changes.”