At the end of 2010, the leader of one of the world's largest media agencies inquired of me on behalf of the CMO of a brand we all know: "Our client wishes to shift $100 million of spend into online and mobile video advertising tomorrow. Can it or even should it be done?"
Hearing this opportunity posited this way was like sniffing smelling salts. For all the discussion to date about how online and mobile video advertising has the opportunity for greater creativity, should be more effective than traditional TV advertising, and is nearing almost as much reach, we have yet to face this ultimate test of scale -- the $100 million challenge.
To successfully court major buys from TV advertisers, we need to meet this challenge head on, but as with any challenge there are obstacles that must be bested. The three major obstructions to realizing the $100 million prize are: scaling the online and mobile video audience and non-offensive relevant inventory, improving video infrastructure and ad workflow, and finally proving to advertisers the immense value proposition that (we all know) lies within this burgeoning medium.
Scale: Increasing Audience Reach and Relevant Inventory
The audience for online and mobile video has grown dramatically over the past year along with inventory and effective reach (the combination of paid/owned/earned exposure), but it still pales in comparison to the easy, efficient reach of a typical large-scale TV buy. As opposed to TV's more than 290 million U.S. viewers, online video offers only an estimated 171 million viewers. And those who do watch video online view only a fraction of the time they watch TV. Why? In part, there is insufficient quality content and the user experience, from a technical perspective, does not yet consistently match or exceed that of TV.
So, what about the 50 hours per minute of new video that is being loaded online and the billions of daily video streams being distributed? The reality is the vast majority of this is from user-generated and "prosumer" content (UGC). Currently, without the ability to easily understand UGC video context/content, it is difficult to deliver advertiser-relevant inventory, while dynamically screening for objectionable material. Without sufficient precautions, the potential harm to brand health/value is too real for advertisers to devote meaningful amounts of spending.
Infrastructure: Agencies and Clients, Publishers, Networks/Exchanges and Technologies Working ... Together
From the demand-side perspective, the business and technological infrastructure and workflow that supports the planning and buying of online and mobile video at scale (with or without simultaneous multichannel executions) falls far short of the TV standard. The disparate members of the video ecosystem do not work closely enough together, leading to a less efficient and effective campaign cycle. While video-technology companies are constantly releasing innovative video offerings, the video market lacks consistent, rigorous technical and advertising operations, along with measurement standards. Finally, and most important, unlike TV there is no comprehensive video agency of record (VAOR) to help brands understand, coordinate and maximize the rewards of this vast distinct and complex medium and take on a media buy of TV proportions.
Value: Demonstrating Video's Value Proposition
Just as TV is not radio with pictures, video is not TV shrunk. Nor is video display with sound and motion. Video is its own distinct medium, with its own distinct value proposition. It is a uniquely targetable, high-engagement medium, but the case still needs to be made.
While some TV advertisers suspect declining efficiency and effectiveness per TV dollar spent, the move to video simply cannot occur by making the negative argument. The first problem is that there is no baseline for online video. TV, on the other hand, already has a decision-making framework and understandable, if flawed, baseline metrics that correspond to an approximation of ROI. Online video must show how it can deliver incremental value by driving clear-cut metrics, which advertisers and their agencies can understand and relate. Current GRPs, TRPs, impressions, views, plays, shares, and weak, un-validated viewer surveys are just not adequate for the task of measuring a $100 million effort.The good news is many of the building blocks are in place, but to effectively court TV advertisers, there is a lot the video industry needs to do to ready itself for the $100 million challenge. We are not there yet, but I sure like our chances. If the video industry steps it up and works together to shed light on the inherent problems and unanswered questions (not the least research-related), we can make this next chapter in video history the one where video comes to earn an even more meaningful place in the marketing mix.
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