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Reckitt Benckiser Breaks Record With $40 Million Video Buy

But Breaks the Backs of Publishers With Onerous Terms and $2 CPMs

By Published on . 10

NEW YORK (AdAge.com) -- Reckitt Benckiser is pouring nearly $40 million into web video in 2010, thought to be the biggest single buy for the medium, according to execs with knowledge of the deal.

RB is looking for mass impressions and synchronizing their online buys with TV campaigns on every continent around the globe.
RB is looking for mass impressions and synchronizing their online buys with TV campaigns on every continent around the globe.
The marketer, owner of hundreds of household brands such as Lysol, Woolite and Clearasil, is essentially doubling-down on its 2009 campaign, which was also at the time the biggest yet for web video at an estimated $20 million. New for 2010: The buy is going global, and YouTube is participating.

But just like last year, there's a significant catch that is making most publishers and some ad networks wary: Rather than the $30 and $40 per-thousand-impressions (CPM) ad rates achieved by premium video sites such as ABC.com and Hulu, RB is looking for CPMs less than, $2.

That means slim pickings for ads in professional video, presenting a challenge for RB's new agency Zenith Optimedia, tasked with finding inventory that even some video ad networks won't touch. But RB is willing to have ads run in some questionable content in exchange for getting huge scale. RB ads have been spotted on pages discussing cocaine and abortion.

Sub-par inventory
RB is fully aware that some of its placements are sub-par, but that's also part of the strategy. "This is a very fragmented market -- even more fragmented than the TV market," said RB's senior media manager, Marc Fonzetti. "What we learned last year is there are a variety of different tiers of video, and not everybody deserves $50 CPM."

RB is looking for mass impressions and synchronizing its online buys with TV campaigns on every continent around the globe. "We very much look at this as TV advertising, just on another screen," said RB's global internet marketing manager, Andy Sarfas. "When we launch a TV campaign, we see an immediate impact on the sales line. When we do an online campaign, we see the same movement as well."

One reason online video buys have been difficult to measure against TV and corresponding sales numbers is they are usually quite small. But RB is buying online impressions in the billions, meaning they have the scale to start measuring the impact as they would TV with reach, frequency and gross ratings points. "For internal purposes we measure it like a TV campaign and judge it like a TV campaign," Mr. Sarfas said. RB spent $725.8 million on measured media in the U.S. in 2008.

Also like last year, RB is using a sophisticated method of verifying that an ad is played and then measuring the level of interaction with it. Much of RB's video ads have an interactive element, like a question or a game. They're working with a London-based company called Telemetry to serve the ad and verify that at least a fraction of it was played.

False impressions
Telemetry Director Anthony Rushton said every publisher and network has different ideas of what constitutes an "impression" and the gap between what a publisher claims and what Telemetry measures is usually 25% to 30%. In other words, an impression is not an impression until RB says it is.

RB is still playing hardball on ad rates, but vendors say they've loosened up a bit and are willing to pay more for placements that perform better. Sites like YouTube, which couldn't meet RB's demands last year, are taking the buy this year, according to executives close to the deal. YouTube declined to comment. RB is also finding that they have to pay a bit more in some territories where inventory is scarce.

Even with the protections built-in, some ads are playing below-the-fold and on questionable sites. But RB's guiding philosophy is that there are plenty of places around the web to serve a video ad without paying the rates charged by premium sites.

Like last year, RB is at once validating the market and taking it down a notch. Why? Because it can, and because it believes the strategy is working.

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