OMMA Panel: Video- The Battle Between Premium and Low-Cost Online Video Placements
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.
September 19th, 2008 at 5:16 pm
Just wanted to say thank for sharing these panel discussions from OMMA. They’re really informative for anyone involved with the emerging world of online entertainment. Great stuff!