Session Description:
When will supply of premium inventory become outstripped by demand? What effects will this have on the online video marketplace? Some advertisers would argue there is a glut of quality, premium inventory online. Some would say there is almost infinite inventory. Who is correct? Can premium video actually command a premium on price? Are video ad networks killing the price and creating a low cost marketplace for video that hurts the chances for growth? These will all be discussed in this session.
Moderator:
Jason Glickman, CEO, Tremor Media
Speakers:
Steven Comfort, YuMe, VP, Advertising Sales
Carrie Kelly, VP Ad Sales, Funny Or Die
Christine Peterson, VP Digital Media Director, Carat
Shoba Purushothaman, CEO, The NewsMarket
Lewis Rothkopf, Network Development, Brightroll

A: Peterson: The question isn’t whether or not it was produced by a professional company, but whether or not there is a technology to alieviate their fears of being associated with pornography or inappropriate language. They don’t really care about the resolution of the video.

Q: If the content were determined to be safe, would that warrant a higher CPM?

Peterson: Sure. If we could have the same reach, then yes. A consumer may be even more passionate about that content.

A: We also need to look at things in the broader context. The super-premium content is usually a byproduct of a broader TV deal, and not really a true measure of CPMs .

Christine: Some of the models for super-premium content is built around purchasing a block, as opposed to the majority of digital content which is purchased on CPM or per stream basis. While that sounds nice, it most cases, they are just repurposing their TV spots. We’re seeing frequency of 7 exposures per session, not just when they come back. We’re looking for 1-2 impressions in an in-stream environment. Overall, those super-premium buys have a negative impact. As someone who tried to catch up on a season of 30 Rock, I hope I never see an ad for super scrubber again.

Glickman: Publishers need to balance the frequency capping with their ability to make money.

Q: From a supply and demand standpoint, there is a lot of noise that all of the video inventory is UGC. When you look at the volume of video inventory on tier-two sites, often times it exceeds what you can find on top-tier sites. What is the roll of video ad networks in a supply demand and value?

A: Brightroll: You can’t possibly overstate the value of video ad networks in this environment. The goal is to supplement what the publisher is doing on their own, and help the agency get the buys across a broader array of quality publishers while avoiding the pitfalls that comes with trying to do that. But you’ve got all of these different player types, formats for them to deal with. As far is the publisher is concerned, you get very competitive CPMs, but not what you’d get if they sold it themselves. But what often happens is “The Spitzer Effect.” You get a huge spike in traffic, and then you have a ton of unsold inventory.

Carrie: As a publisher, there is a need for ad networks. When we did the Paris Hilton video, we had a 16x spike in traffic. But nobody has the chance to pre-sell something like that. What we need to figure out is how to have something in-house that we can use to take advantage of that, and work together to increase the efficiency. We need to open up the dialogue on how the publishers and agencies can work together.

The behind the scenes is that we have to think about the end user. As a start up, we’d rather sacrifice some revenue to make sure that user comes back to us again. We want the right brands because we are building an audience as much as we are building the site.

Q: Are video ad networks hurting the CPMs?

Glickman: I think most of us would disagree with that. For standard ad networks that may be true, but not for video.

Brightroll: The people who run the video networks have been there before, and seen what happens. So we are determined as both former publishers to not go down that road again. We only sell on a CPM basis to make sure that CPMs don’t go down.

YuMe: We give our technology to the publishers we work with, and 99% of the time it is better technology than they already have. And that gives their sales team the ability to sell formats and analytics that they couldn’t deliver on their own.

Q: When it comes to formats, price and inventory, formats obviously play a role. How do we see the formats play into the conversation?

Carrie: On the day I started at Funny or Die, we said that there will be no pre-roll on our site, ever. We have to go back to the user experience. As Christine said, she was so annoyed that she’ll never buy a product. So we need to keep the user in mind and how we protect that experience.

Christine: Just to play devil’s advocate, the advertisers spend an enormous amount of money creating a :30 second spot. Not to say that it is the end all and be all, but they are still working. They still drive a brand message, equal to and above the performance on TV. Users are less annoyed than they are with TV, and we don’t see TV changing their ad model. When I say to an advertiser, “I need you to spend more money for the web,” they say “Forget it,” and spend the money where they know it is working.

Brighroll: One of the things that is really tense right now is the :30. In terms of branding and recall, they are the most effective unit out there. So you have the opportunity to do more than repurpose what you’ve got on TV. If you are targeting techies, they know the benefits of having more RAM, so you can exploit that opportunity to spend the time with them because you can deliver a much more targeted opportunity.

Christine: Coming from a media buying perspective, there’s only so much you can do and say to get them to test the waters in the space. Now we’re seeing interactive video, and we can create ad units for the space. But we need to create more case studies to prove that they work.

Q: How do we feel about formats as they pertain to the content? YouTube said they wouldn’t do pre-roll but would do overlays.

Christine: its less about who created it and more about length.

YuMe: The biggest problem is seeing a :30 second ad before a :15 second piece of content. But it is rare that we get more than one piece of creative. But technically we have the ability to do that.

Q: If you can create content that is an ad, but also something that is content and can stand on its own, is that something we see as the next big thing or is it a fad?

Carrie: It will continue, but it is really difficult. If you, the publisher, are doing everything from the script to the talent to the editing, then we are playing the agency, the producer and the publisher and then we need to go do the distribution as well. It’s a lot easier, like with the Dove campaign, where the agency did it, and seeded it. We can’t try to trick the consumer.

Brightroll: Trailers are a great example. They are entertainment, they are high def. There’s a burgeoning market for literary trailers, where they hire actors to create a commercial. Its entertainment that meets everyone’s need at once.

Q: Content doesn’t exist just on one site anymore. How does syndication, and hyper syndication, affect price?

A: YuMe: When you look at the widget world, where content appears on a blog or on facebook, the issue will become addressability. Can you tell who I am?

Q: Do top-tier sites warrant a higher rate than the same content farther down the tail?

Carrie: yes. If you can buy a targeted audience, if you can buy them in that bullzeye, then you should pay a premium for reaching them in a premium environment.

Brightroll: If you are having your content associated with premium, adjacent content, then you should pay for that association. But advertisers don’t necessarily see it that way.

Why?

Brightroll: One is safety. Advertisers pay to be associated with your brand.

YuMe: Demand and true scarcity will play a huge roll. Auto content, business and finance, travel, that will support higher prices across the board.

Q: With regards to TV, there is a comparison of CPMs. In general, people think that online CPMs are higher than TV. Should they be?

Christine: No. We don’t have the metrics to prove that we should pay higher prices for online. But you can’t compare them. Broadcast buyers buy cost-per-point.

Brightroll: Broadband should always be higher CPMs than TV. You have a lean forward audience. On TV, you have a cost-per-maybe. On the interactive side, someone is actively engaged.

Glickman: We’ve heard that the CPMs on TV have been watered down to address that cost-per-maybe.

Q: Is it an issue of education?

Peterson: Maybe, but what we hear from TV buyers is that they turn on the TV faucet, and the sales come in.

YuMe: When I worked in TV, we knew that we’d get exactly how many number of calls into a call center, exactly what time the spot will air. TV can be extremely precise. But when you are looking at an ad that is in a video player, you are waiting for that content to play, and you are very engaged. With TV, the push has been on to move away from show ratings and towards commercial ratings, and that cracked about two years ago. They are getting close to figuring out who watched the ad vs. who watched the show. But if you are on the Web, you are one click away from engaging with the advertiser. On TV, you have to get up, turn on the computer, etc., You are much farther away from that engagement.

Audience Q: What about convergence when TV and the Web come together?
Brightroll: All of the set top boxes run off of basic IP video. But there is no barrier to getting the same kind of ads and metrics off of the living room TV than off the computer. The technology is there. The convergence has happened. Its just a matter leveraging the data.

Audience Q: What goes into CPM rates, and why are they so much lower for UGC? What are the other inputs?

Christine: There is definite value to the body of content that we can trust. A lot of the established rates for the super premium placements happened because they were bought by broadcast buyers without being negotiated. They were set without any real rationale. There is also a lot of value added research that can help you prove whether or not something worked. With a lot of the premium content, you can do a lot more than with UGC. You can brand the entire environment if you’d like, which has a much longer impact than a UGC environment.

Jon Stewart and the crew of The Daily Show, arriving in Minnesota for the Republican National Convention took time out to pause for photos outside the Minneapolis St Paul airport bathroom where former Senator Larry Craig had his famous moment in the spotlight:

Above: Stewart outside the MSP Bathroom where Larry Craig was arrested

You gotta love the power of online video to capture these little moments. (via Wilshire & Washington)

A press release from WebTrends highlights the massive traffic Chinese state broadcaster CCTV experienced during their coverage of the olympic games. While we hear the CCTV online video coverage was delivered at lower quality than NBC due to the current state and capacity of Chinese networks, CCTV.com managed to average more than 6 million unique viewers per day during the games versus 4.3 million per day for NBC.

This is not an apples to apples comparison, China has more than 4x the population of the U.S., so more viewers is to be expected. But 100 million total viewers is nothing to sneeze at and a testament to how far China’s networks have come. CCTV.com streamed more than 3,800 hours of live coverage, 1,600 more than NBCOlympics.com. To a large extent the Chinese public is skipping cable and going directly to broadband for their media experience.

Internet ratings company Quantcast picked up another online media star for its senior management team. Former SVP of Yahoo’s Publisher Network, Todd Teresi, has joined the fast-rising new media measurement firm (no, not by their own measurement) as Chief Revenue Officer.

Teresi brings his media expertise - and more balance - to the mathematician and engineer heavy leadership, along side Chief Marketing Officer Adam Gerber, who joined The Q last November from Brightcove and previously Mediavest.

The blogosphere (read: ValleyWag) seems concerned that the company currently doesn’t have a product to sell, but we’re not. My conversations with CEO Konrad Feldman, combined with Gerber’s and Teresi’s track record of growing successful media businesses, leaves little doubt in my mind about their future successes.

As Abbey Klaassen reported in AdAge, the company believes that display advertising (and video, I presume) should and can be as targeted as search advertising. Teresi told her:

“The tailoring of content and media to individuals should apply to all aspects of advertising, not just the bottom of the funnel,” he said. “We operate in unit-based media economy where everyone gets the same content and sees the same ad. We’re moving to an impression-based economy. We’ll provide the platform that will enable the industry to do that. And as we introduce those sorts of services, we’ll charge for them.”

Congrats on the new gig, Todd!

I needed a new subject line to switch gears, rather than segue into the good news with a bad title.

Today, some of the leaders in the video advertising industry stood up for themselves in a very rare - and unplanned - synchronized release of data in support of the pre-roll format. Tremor Media (my employer) announced that they were observing 80% pre-roll completion rates. Some of those “other guys” - Break and Panache - announced some very high completion rate data for their pre-roll campaigns as well.

Now of course I’m biased, and think that our data is more accurate since it was based off a much larger sample size, and also don’t believe CTR is the appropriate measure of success for any pre-roll campaign, even with a call to action. Users want to see content, not click away to “not” watch the content they opted in to watch. But I digress.

Lets also not forget that Jupiter’s Nate Elliott also issued a report, highlighted in today’s AdAge, that shows an increased acceptance of pre-roll. Nate noted that the abandonment rate is much more similar to channel surfing on TV than an issue with the advertising, per se.

Overall, its been a competitive few weeks in the online video advertising world, and Q4 is only going to get hotter.

I guess nobody is immune from consolidation. Today, Forrester Research announced that it has acquired JupiterResearch for $23 million plus liabilities.

On Jupiter analyst that OVW spoke with was very excited about the merger and predicts very solid synergies.

Integrated Media Measurement, Inc. (IMMI) has issued a report showing that up to 20% of episodic content viewing occurs online, depending on the genre of the content and the amount of time the show has been on the air. In a some cases i is higher than DVR viewing of the broadcast content.

Download the full report.

Some of the more striking data shows that online viewing is flat out replacing TV, not just catching shows you missed or clips that you wanted to watch again. Another key difference showed that white, affluent, well educated, working women aged 25 to 44 were the dominant viewers of online TV content, compared to the male 18-25 demo that is typically associated with online video. To me, this signals the shift away from the UGC fad into higher quality, professionally produced content.

No surprise that the folks at AdAge get it. Online ads are a reasonable value exchange for good content. Not so much for UGC. Just look what happens when you stop asking people if they like advertising, and instead ask them if they are giving and getting something of fair value in the exchange.

Remember The Covenant…..kinda sounds like it to me……

Pew Internet and American Life Project yesterday put out their annual home broadband penetration report. 55% of American homes now have broadband connections as of April 2008, up from 47% in March 2007.

Above: Pew Internet Home Broadband 2008 Key Findings

While in the U.S. and Europe, broadband has evolved as an extension of MSOs, in developing nations the cable phase has been skipped entirely and wireless penetration continues to outpace broadband growth. Daily Wireless points to a study from Gartner predicting wireless penetration in India will grow from 20% now to 60% in 2012.

Which means that as the world flattens, here in the U.S. we can expect to view a lot more online video shot on mobile devices in foreign countries. And when distributing content for an international audience we should plan to deliver it in a format accessible to the millions who will use a phone as their primary source of media consumption.

In case you haven’t clicked on every link in our blogroll (but why haven’t you?), head on over to Mark Glaser’s MediaShift blog. Mark spoke to a number of industry leaders about the state of online video advertising, and I must say that its one of the most balanced pieces you’ll get to read.

But if you absolutely refuse to read anything about online video except us, here’s what I had to say:

Probably the biggest mistake people make is in equating professional, studio-quality videos with the more amateur content that dominates video-sharing sites.

Yep. Some content just isn’t monetizable. Go figure. In case you need a refresher, pre-roll isn’t bad. Poorly placed pre-roll is. Remember the covenant! And more importantly, remember not to piss off Steve Hall.