Three Lessons I Learned from Digital Video Advertising’s 1st 20 years

By Matt Wasserlauf 

Twenty years ago, I went to work for The FeedRoom and so began the most incredible, magic carpet ride of my life.  The lessons learned, both business and personal, have been indelible.  The three most salient, I share with you here.

“No one will watch video on their computers!”

“Why would anyone watch TV on a small screen?”

“It doesn’t work!”

“Nothing will replace my TV!”

Heard ‘em all.  In 1999, the world had bigger problems, though, than to ponder the future of Digital Video.  Bill Clinton’s Impeachment trials were underway, Timothy McVeigh was convicted for murder in the Oklahoma City Bombings and Y2K was right around the corner.  No one was ready to proclaim Digital Video the successor to TV’s daily dose of American “comfort food.”

It was in those early years that I trolled the halls of digital media conferences, “MadMen” ad agencies and Madison Avenue city streets to hawk Digital Video to the market.  I felt like a solo warrior on a mission in a world of doubters and detractors.  It was as exhilarating as it was exhausting. 

The key takeaway for me back in Digital Video’s origins was “faith.”  You’ve gotta have it or you’re toast.  To win in anything, you have to persist.  You must charge the hill, keep charging amidst the fusillade coming at you.  Everyday, you must find another reason to take another step forward.

When times were at their worst, I dug deep down to tap that faith that was within.  I just knew, given the chance, people would watch this new form of TV if it were in their hands.  What’s better than TV whenever and wherever you want it!!!  

One of my lowest points came in the early 2000’s when I saw Donny Deutsch, the face of Advertising, on MSNBC say he’d NEVER recommend Digital Video to his clients.  Watching this, I nearly fell off my chair!  I left the TV business to get into this??  Well, it wasn’t 48 hours later that I ran into Donny on a Saturday night in the Hamptons.  I excused myself from my buddies at the bar and confronted Donny at the door.  

“I know exactly what you’re talking about.  Tell you what.  Call my office Monday and ask my assistant to get us on the calendar.”  It took about three months, but I got my day in court and with that, Deutsch Advertising was on its way into Digital Video Advertising.  

Lesson #1: You have to have faith and persistence to win in Digital Video Advertising — as well as in life.

Digital Video advertising has had an amazing 20 years growing from zero to the $30 billion business it is today.  Spend is now accelerating at 60% a year because the Ad world has learned my lesson #2: Digital Video Advertising is the most powerful form of advertising on the planet!

Most of those 20 years were tough sledding.  So many systems and processes had to be put in place for the business to come together.  Ad serving, data platforms, re-targeting, content formation and distribution, fraud detection and viewability tracking and on and on and on.  As all of these pieces were put in place, Digital Video Advertising became what it always was destined to be: the most effective form of advertising on the planet.

The one piece of business that provided me the best look at Digital Video’s effectiveness was a campaign my mobile video company Torrential executed for Papa John’s which at the time was bought out of Zimmerman, their ad agency.  All the biggest video platforms were tapped to distribute Papa John’s Peyton Manning TV commercials.  YouTube, Yahoo, ESPN to name a few.  My company Torrential was the video provider focused on mobile video and our success was by far and away, the most effective.  By distributing the commercials which were, on their own, powerful (Peyton Manning as host, followed by a promotional offer of pizza with a chocolate chip cookie as dessert) with the targeting to mobile video sports apps during mealtimes (lunch and dinner), we generated high response rates and sold thousands of pizza orders.  Torrential demonstrated the power of video creative properly targeted to customers on mobile phones.  Viewers who were hungry clicked on the ads (over 8% Click-through rate) and bought pizza en masse.  It was the perfect demonstration of how Digital Video Advertising provides not only the powerful branding that still exists in TV but also sales that all of sudden is one click away.  The holy grail of Advertising!

The “gold rush” mentality toward the Digital Video Industry has attracted as many bad actors as it has good ones though.  What became apparent during the Papa John’s campaign to me is that a lot of the poor results from some of my competitors was less poor execution than just outright fraud.  It’s been well documented in the Digital Video Advertising business how much fraudulent activity goes on.  Some estimates hover around 50-60%!  So much of this goes on that the ANA (Association of National Advertisers) had to commission a report to out these bad actors and shine a light on the problem.  This fact has provided me my final lesson #3: As great as the Digital Advertising business is, you still need the help of good people who do good business to win.

The 20 year history of Digital Video is littered with so many companies that were run poorly and many run fraudulently.  I suppose no industry is perfect but Digital Video has had more than its fair share of bad practice.  You only have to look to the top to see how’s it manifest itself.  YouTube and it’s owner Google, were called out for salacious content across its platform, particularly to kids.  Facebook has been maligned for “fake” content and influencing our national elections.  When the titans of the industry lead in that manner it’s no wonder the business has had it’s fair share of problems.  The influx of venture capital into the business has also fueled a great deal of bad business and poor decision-making.  I worked for an early video start-up called The FeedRoom that ran out of money in the early 2000s.  That served as an early lesson learned for me.  Over the 20 years of Digital Video, I’ve seen many more share a similar fate: Steven Spielberg’s Pop.com, DEN: Digital Entertainment Network and Videology to name a few.  Today Jeffrey Katzenberg’s Quibi is reported to be burning roughly six million dollars a day.  The business of Digital Video needs to be run as a business in order for its potential to work for its customers.  It’s a simple lesson that I’ve come to learn over my 20 years in the business and the one I hold to as I embark on the next 20.

2040, here we come!