The Reach of Video Advertising
Nor has the company, a four-person startup just eight years ago, lacked in execution of that vision. Today, the company’s 850 employees provide an array of services that revolve around taking a completed video ad, distributing it to users on any electronic device, and supporting the ecosystem of companies involved in video advertising. Extreme Reach’s path to this point is a model of applying lean and agile principles to systems development and change-management strategies.
Video advertising is a surprisingly complex business—particularly in light of the popularity explosion of new formats and outlets serving consumers’ screens of choice—and a specialized market under transformation. To succeed, Extreme Reach focuses on customer needs and constantly refines and upgrades services.
Projected digital video ad spending in 2016
Completion rate of video ads in social and mobile gaming
Amount of US email marketers that report increased engagement rates in messages featuring video
Rate at which consumers are more likely to click through video ads than standard banner ads
The company started out as a provider of video storage and distribution and has added to its portfolio through organic growth, as well as several acquisitions. Incorporating those companies, their employees, and their technology has been an ongoing challenge, though Brackett says the basic blocking and tackling of that process has been completed. Now, it’s time to extend and refine its offerings to better serve the market.
After ad agencies or advertisers complete a video, Extreme Reach comes into the picture. The company reformats video for multiple channels and distributes the ads via a cloud-based system according to the advertising buying plan. For TV, Extreme Reach delivers the video commercials themselves to the broadcast outlet, where they are inserted into ad breaks. For web and other digital outlets, the company’s servers stream video ads according to complex protocols in order to reach targeted groups.
Extreme Reach’s systems also track impressions, clicks, and views so that ad agencies can monitor viewership. The company has also partnered with The Nielsen Company to import that organization’s ratings-system data for Extreme Reach customers.
Growth and Expansion
In 2013, the company acquired Digital Generation, Inc., a large competitor that, according to Brackett, increased the scale of its capabilities by three- or four-fold overnight. Melding the systems of the two entities was a high-stakes undertaking. “We didn’t have a migration path,” he says. “We did it all over one weekend.”
Diligent preparation, including extensive load testing, was critical to the effort. In addition, the architecture of the company’s original platform, designed to scale up to support the corporate vision of being the dominant industry player, has proven to be robust enough to handle that project and the company’s subsequent business-volume growth.
Another key acquisition in June 2015, Talent Partners, bolstered Extreme Reach’s ability to track and pay actors used in video advertising. “Talent Partners had been in business for many decades,” Brackett says. “They had older technology but had established good customer relationships.” This deal also boosted Extreme Reach’s volume of business significantly. Today, the company pays actors $1.2 billion annually based on residual fees they earn after their video ads air or are viewed.
“We’ve found that it’s easier to train somebody in the technology than to train them to become good communicators.”
The rules for these payments are often complex, depending on the type of outlet. Extreme Reach’s residuals tracking system automates payment processes, relieving ad agencies and video-production companies of this administrative function. They’ve also recently introduced their “TRUST” tag, which addresses talent/rights compliance issues that affect one in three video ads running online.
“We’ve always emphasized communication above all else,” Brackett says. “One really talented person who is skilled at communication and empowered to get things done can accomplish ten times what the average person who is not skilled in communication can. We’ve found that it’s easier to train somebody in the technology than to train them to become good communicators.” That’s not to say that the company looks for technological neophytes; rather, it vets qualified recruits thoroughly for communication acumen.
After making an acquisition, Extreme Reach sets out to convey the benefits of its culture to new employees. “Sometimes, the culture of the acquired company is very different from ours,” Brackett says. “Our experience, though, is that most people have really embraced our approach.” The management philosophy emphasizes employee empowerment over bureaucratic rules. Managers provide frequent, rapid feedback on performance.
Creating Forward Progress
These practices fuel the company’s agile technology-development approach, whereby development teams work on a two-week delivery cycle, releasing upgrades consistently every two weeks. Extreme Reach strives for a “tight feedback loop” between developers and customers so that the company’s feature refinements are constantly informed by customer input. The result is “continuous, relentless forward progress,” Brackett says.
Based in Needham, Massachusetts, the company’s acquisitions have made it a geographically dispersed operation with fifteen offices across North America and a few sales offices overseas. Brackett stresses that with short technology-development cycles, everyone involved in systems development must know what their colleagues are working on across the organization. Daily teleconferences give everybody the opportunity to stay up to date, and frequent Skype and chat activities reduce geographical barriers to collaboration. Frequent communication helps the development arm of the company to strive for “situational awareness” so that teams in different locations can better prioritize their work according to organizational goals. Because of that, Brackett sees establishing the importance of communication to new employees as the most critical step after an acquisition.
Tight coordination will be critical as the company integrates its individual products to an enterprise platform model to provide more seamless service. Emphasis will also be placed on making interfaces and services more user-friendly while making the platform more sophisticated with additional features. Indeed, the company has most of the building blocks in place to achieve its strategic vision of powering global video advertising with “full, end-to-end, one-stop shopping” for all players—including ad agencies, advertised brands, talent agencies, and video and web programming outlets—for the information they need to drive video advertising.
There’s still plenty of work to do, but the development team’s agile approach with constant, frequent refinements—rather than infrequent, major overhauls—suits the company well. Customers’ needs shift often in the fast-paced world of video advertising, particularly on new platforms like mobile video. For Extreme Reach, incremental, iterative platform upgrades will be key to achieving its ultimate goal of powering advertising for the whole world.