UM: The Great Video Debate - David Cohen - MediaBizBloggers

Is it better to be different/better/special – or is it better to be the same?

Is it better to conform to the way that billions of dollars are currently transacted or do we need to create a new paradigm?

Which is more important, the right audience or the right content?

To GRP, or not to GRP?

These questions and others were discussed at the recent NYC gathering dubbed the "IAB Digital Video Agency Day". We managed to pull together over 100 agency and media professionals to discuss the growing online video marketplace. It was a great discussion for a number of reasons, but primarily because we had a few "traditional" buyers (I know, you hate that) in the audience, which added a healthy dynamic to the discussion.

As an industry, we have many data points that should translate into explosive online video advertising growth. While we have seen some movement, it is still a mere fraction of other sight, sound and motion marketplaces (read: television). It is interesting to look at this from a few perspectives…

In Corner #1:

Online video delivers the same rich, emotive experience as television, can be infinitely targeted and allows for full interactivity.

Online video comprises nearly a third of all time spent online.

No clutter! For all online video, there is 99% content and 1% ads (comScore) compared to TV, which is about 75% content and 25% ads. If you take out all user-generated content and focus on long-form online video it is still 92% content and 8% ads. Your ads will be noticed.

It performs! According to a Nielsen IAG study that has been making its rounds for a while now, online video is more likely than television to deliver Brand recall (50% vs. 28%), message recall (39% vs. 21%), and likeability (26% vs. 14%).

In Corner #2:

Online video is WAY overpriced. On a CPM basis, television delivers audiences at approximately $8-15 CPMs, while online video is more along the lines of $20-40. When you add demographic CPMs on top of that online video gets even more expensive. Is online video worth a 3-4x premium? The television buying community doesn't think so.

It's far too complicated. Different ad units/formats, VAST 1.x/2.x, pixels, traffic sheets, data partners, audience verification, content verification, oh my.

No scale. If we were to significantly increase the amount of ad spend in high quality long form content, we would simply run out of inventory.

Where do we go from here?

There is no doubt that there is an extraordinary opportunity for growth in the online video ad marketplace. For us to progress we need to do a few things. For starters, the conversation must evolve from one of COST to one of VALUE. Today we are far too preoccupied with the perceived high cost of online video relative to television. What we don't know is how much it is worth in terms of driving business results.

There is a significant research project moving ahead around overall online measurement that brings the industry (AAAA, IAB, ANA) aligned around a common measurement standard. While this won't be a quick fix, it does have the potential to allow us to create a more uniform apple to apples comparison across media types.

In addition, as we all learned in ECON 101 – the marketplace revolves around supply and demand. Clearly we need more supply. Not (insert furry animal here) on skateboards, but high quality engaging storytelling that captivates consumers.

Questions still remain around who should be buying online video today and how we should organize ourselves structurally for success as agencies, clients and media partners. As soon as we figure that out we will need to figure out video delivered via mobile devices, video via Xbox/Playstation, video delivered via digital OOH, and on and on.

That's what makes this business so darn exhilarating, right?

Please let me know your opinion. Would love some new perspectives.

David is EVP, US Director of Digital Communications, David’s central goal is to spearhead UM’s digital and alternative media offering across the US and to accelerate, integrate and intensify a digital best practice throughout the UM universe. David can be reached at david_cohen@universalmccann.com.

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