When it comes to the subject of online video it’s difficult to know where to start. The video market has exploded over the last 18 months, especially video networks; at the beginning of 2011 we had 1-2 publishers in this space, there’s now over 12. That’s a whole heap of sales teams keen to get in front of OMD and give reasons why their network should be the network of choice. So we are left with the question of who has access to the best content and how much?
When video first came on the scene it was very much sold as TV online, providing additional or incremental reach to current media plans. 7, 9 and 10 all launched their catch-up TV service and found the demand astounding, to the point that it sold out up to 3 months in advance. Due to its scarcity digital CPM’s often yielded higher than that of TV CPM’s.
This process established clear demand in the market for video from all parties
- Clients understood the principle, and had already spent hundreds of thousands of dollars creating TVC’s so there was no additional time or costs signing off banner creative.
- Agencies needed more video inventory at a lower cost to be able to effectively and efficiently test video at scale.
- Publishers saw the huge demand and opportunity in the market and quickly made plans to create more video or licence it from outside of Australia. The success of Hulu in the US spoke volumes for how it had changed TV viewing habits and how much advertisers were investing in this space.
The key issue that set Australia apart from the US or Europe is that Australia has a limited amount of local video inventory. The local leader is obviously YouTube which owns around 50% of the online video, so the market needed to look beyond this to get the scale required to even start to contend with the reach of a TV campaign.
So what we have seen over the last 18 months is a scramble for exclusive, overseas quality content sold at competitive CPM’s. But where exactly are we buying? What are light / no TV viewers consuming?
This is where the video networks and DSP’s come into the picture. They buy, sell, and exchange inventory according to supply / demand across 1000’s of sites. These sites might be very well known names in Australia selling remnant video inventory, or they might be some of the leading video content partners in the US such as Blip.tv, 5min or other less well known sites that have video content. Essentially there is a lot of quality video content out there, however because of the high level of competition to get access to, and the inferred targeting that the networks apply, your TVC could appear before the latest episode of Gossip Girl, or it might appear before the next level of a video game.
So it’s really comes down to case of understanding quality versus quantity. Yes, there are video networks out there that can guarantee you R&F at a competitive cost, however is the quality of this view likely to be similar to catch up TV on Channel 10, I very much doubt it. The expectation level from the client needs to be established because ultimately, in this space, you get what you pay for.
OMD has developed trading Terms of Business for video specifically to ensure we are managing video buys effectively. These encompass our video guiding principles, with transparency being the number one priority. Flexibility is also key; video is changing rapidly so this is imperative, we need to have the ability to remove a channel we feel is inappropriate, gaming for example. Finally we want to work with publishers who help us to understand effectiveness quickly through research and measurement. There’s no doubt these guiding principles will continue to evolve so watch this space.