OMMA Session: Risky Business or Lost Opportunity: Video Ads in Questionable Places

Session Description:
In a sluggish economy, when budgets must stretch, will marketers be more willing to roll the dice on running ads in questionable places? What are the pluses and minuses? What strategies, checks and balances should they have in place with regard to their agencies and networks? This panel will debate the things you’d do today, and those you’d have never done four years ago. A discussion of the learning, the pros and cons and how this economic climate is shifting media thinking.
Speakers:
Sarah Baehr, Vice President-Media, Avenue A Razorfish
Jordan Bitterman, Senior Vice President, Media & Content, Digitas
Steve Mitgang, Chief Executive Officer, Veoh Networks
Ross Sandler, Senior Analyst, Global Internet & Media Research, RBC Capital Markets

Q: What are the differences in expectations right now, given the environemnent?
A: (Julie, replacing Sarah Baehr) – A lot of the tactics are still working, so clients are sticking with the overall strategy. We haven’t seen the huge cuts yet, but they are shifting to more efficient tactics. We’re setting expectations that the ROI isn’t as strong as is was, or as it could be, because we’re being scrutinized a lot more.

Steve, Veoh: From a DR perspective, the budgets are going to get hit. In the video space, which is incredibly nascent, the opposite is happening. Its an experimental market right now, and brands don’t want to sit on the sidelines and miss the opportunity.

Q: Is it the same dynamic as the early days of search?
A: yes. Its better to be playing in the space, learning which levers to pull, making mistakes, which gives them a tremendous advantage. A brand that understands the creative, the interactivity, the flighting, etc., isn’t something you can get by reading the WSJ.

Q: Google has had tremendous difficulty figuring out YouTube. How comme they can’t figure it out? Are there structural issues? Is it premium vs USG? Lack of inventory?

A: Jordan: You are seeing things that are more ‘long tail’ than what people who are used to buying traditional broadcast are comfortable with. You are seeing less of an interest to get in there with big dollars. In today’s “flight to safety” there’s less of a push. The more digitally savvy brands are starting to play with it. But its more of a question of what to do in that space. Do you run your TV spot, or do you create custom content? Instead of being adjacent to content, you can actually be the content. But that is more expensive, so there isn’t as strong a push to do that right now. I’m surprised we don’t see more dollars in this space right now, but that will take off in the next 18-24 months like a hockey stick.

A: It is really hard for a marketer to create a meaningful form of engagement when you have what is essentially a two minute experience. We found that most YouTube videos were 9 seconds or less. What is the ad unit that you run around a 9 second piece of content? That’s YouTube’s structural problem. YouTube isn’t any more risqué than MTV.

Q: (Jordan) Will we be watching content in 22 and 44 minute lengths? Or will we be watching more short form content?
A (Veoh): We’re actually shocked at how much long form content people are watching on Veoh.

Jordan: The logistics and development costs are a lot more complex for creating content. That is one of the fundamental problems right now.

Q: Standards. Where are we on the paradigm shift in getting to where display ads are today so agencies can rapidly adopt it?

Julie: We shouldn’t be there yet. Its too soon to say “this is the right way to do it.”

Veoh: We look at ad units as the structure of what you are buying rather than looking at it as the overall campaign. We know what a 5 second or 10 second ad looks like, but we need to still figure out what the real opportunity is.

Q: Content and Transparency. Where are we in figuring out where we are in determining what is safe? Can you scan a video clip and figure out the type of content?

Veoh: A few issues there. Is there enough reach? Is the content brand safe? We make sure that we’ve got a clean, well lit environment. “The great thing about porn is that you can see it.” Meaning, you can easily identify it and remove it. Our policy is to just not have any there. On the reach side, it is still small. But if you want to reach a 15-34 audience, or hyper fanatics that tweet and have 10 facebook sites, there is a lot of density of really important people to reach. You can’t buy tonnage, but you can but very important influencers .

Q: From an agency side, are you comfortable with the metrics?
Jordan: You are taking risks when you have a brand marketer that would load up their T&Cs with caveats with where they don’t want to run. You have to look for the kind of marketer that wants to go at things a little differently. Just like the web started with males 15-34, the same thing is happening with video right now. Over time, it is going to start looking more like the world in general, and will probably get there more quickly than the web, or ecommerce or broadband did.

Q: Production quality. Is a video clip of Walt Mossberg talking about the iPhone on his webcam worth $80?
Julie: yes. If it’s the content you are looking for and it delivers the audience, than yes, it is worth it.

Jordan: Years ago, there were three broadcast networks with three hours of primetime. There were limited options. Now if I want to watch Walt Mossberg, I’m raising my hand and saying “yes I want to watch that” whether it is grainy or two minutes or 20 mins long.

Q: The web is an active environment, TV is passive. Where are we with video search? Does the activity need to switch from active to passive?

Veoh: Search isn’t going to be the primary vehicle for discovery of video. It will be part of the process, but not the primary process. Clicking the remote control on TV is about trying to find something interesting to watch, but its not searching. Its browsing. Recommendation engines and algorithms with play a much larger role in helping the discovery process.

Q: Pre-Roll. Advertisers love it. Consumers hate it. How do you think about pre-roll and using it? What is working and how do you walk the line?

Julie: You need to be careful. With pharma clients, they want to put all the legal in the ad, so you can’t do a :15, you have to do a minute long ad. If it is really annoying to even think about, it is going to be annoying for the consumer. But there is a value exchange. If the user knows there will be value there, then its not bad.

Jordan: You always need to think about the context in which the marketing is being received. You don’t want to just sit adjacent to the content. If you can have message that is specific on how to activate the experience you just saw in or along side the content, that is very powerful. Its expensive, but can be very powerful.

Julie: Samsung has a great ad for one of their new phones that you can take part in the experience of the guy in the story. Do you go to sleep or go out? The user takes part.

Veoh: We’re dialing back the inventory for pre-roll to create a better experience for the user.

Q: Where are we with mobile?

Julie: We’re experimenting, but the iPhone is blurring the line between what is mobile and what is browsing the web.

Jordan: The experience that comes from an application that is served is much more powerful than just serving a banner. We’re shifting from a WAP experience to a Web experience. You need to give people an experience that users can participate in, and has engagement that you can track on the back end. We’re looking for the “Killer App” right now. We’re moving from a “one platform, one provider” environment to an environment that will deliver the killer app.

Julie: Hopefully we’ll stay out of an economic environment that stops people from experimenting.

Q: How are DR advertisers thinking about advertising in the economic downturn?
Jordan: You may stay away from branding initiatives that are tough to measure, but with DR you know what the ROI is, so we aren’t seeing a slowdown in that.

Q: How are you looking at targeting users vs. content?
Julie: There is a huge appetite for that, particularly in the ad exchange environment. But when you look at DR metrics, heavy reach leads to conversions. So it’s a balance.

Jordan: We don’t know what the ad exchange will be called in the future, but it will become completely partner, portal and network agnostic.

Q: How will that impact the ad networks?
Jordan: The publishers control the content and who they will allow to advertise to that audience. The future of the networks will depend on the amount of quality content that you have. If this “uber exchange” comes into play, I’d be making sure I have quality content to offer, more than just the breadth.

Veoh: There will always be quality content where there will be a premium placed on advertising on that content. But we are also all creating our own quilts of what we find interesting, and there isn’t enough of that to avoid targeting audiences. Advertisers are going to need to develop messaging that works in those environments. They aren’t going to find bigger and bigger places to advertise, they are going to find lots of smaller places to advertise.