SHENAN REED: When we first did online advertising in 1994, when we figured out how to price it, we priced it based on print ads.
That was fine until we started to move into sight, sound and motion. That means the metrics we use to buy it and equate it have changed. We tried to equate it to television and had conversations around GRPs and cost per point. There’s still a lot of confusion in the marketplace around digital video and how to compare it to the other television sources.
How do the digital people work with the television people?
The television people at MEC will probably tell you the CPMs we pay in digital are too high compared with what we get on cable. On a cost-per-cost basis, it's much better getting the extended reach in the cable buy than putting it in digital.
The digital guys will say, “But I can get really exact targeting. I can frequency cap in digital. I can tell you exactly the audience you’re getting, which you can’t necessarily get in cable. I have a one-to-one understanding of the consumer, not an assumption of who’s in the room.”
Digital will continue arguing the targetability of digital, television will argue that it can bring pricing down, that it can get more effective reach at a cheaper basis. But the two will continue to merge. There will be a middle ground somewhere.
I don’t think it’s as dramatically fast as the industry makes it out to be. The industry is trying to tell us that it’ll all be solved in the next six months or year, we’ll all be buying video programmatically across all platforms.
Well, it’s also been the year of mobile for 10 years.
How does online video change upfront negotiations?
It varies depending on the partner and what they’re trying to accomplish. With some partners, we include digital video and digital in general. In other cases we do a digital-only upfront. There will be little movement on a client-by-client, agency-by-agency basis.
Eventually we won’t talk about television or video. We’ll just talk about reaching consumers. The buying mechanism will change, the same way we see the FT changing to a cost-per-hour business for their banner inventory.
Will that be the norm?
Digital banners will eventually come to a place where we’re buying based on time, not an impression. An impression can last just a millisecond. But the time a consumer spends on my ad is much more interesting to me.
That’s what I get in television, whether it’s 15 seconds or 30 seconds. I want to understand those units of time in digital as well. I want to understand the bigger picture of how much time people are spending on my ad, and therefore how much time I need to be in front of a person to get a response I want, or if I need to move away from that person because I won’t get a response.
You mentioned that video negotiations vary client by client. Under what circumstances would you need to negotiate both online video and TV at the same time?
If I’m working with a television partner, but their digital video extension has no reach, it’s not valuable to go in and create an entire upfront relationship that has both. But if I’m working on a partner with reach in both places, which there aren’t a lot of, then it makes sense to do both.
That’s the starting point of the conversation. We look at everything from reach and quality and price. We go through all the potential metrics. They could have tremendous reach, but the quality could be garbage. It has to add up to a lot of different factors.
How confident are you in the current tools that let you assess quality and reach in online video?
There’s no consistent industry standard across them. I’m very confident in ad server numbers, but when it comes to tools for competitive measurement – like how many impressions competitors are buying, or how many unique impressions a website gets – there are a lot of different methodologies. And every good researcher needs to spend their time cross-referencing various tools and taking everything with a grain of salt.
I’d love to say this entire industry is a science, but it’s not. There will still be moments where we look at somebody who doesn’t quite have the right reach, but they’ve got the right audience. That’s not something a syndicated tool can tell you. But it’s something someone with years of experience can look at and say, “That’s where I want to be.”
How do you win a video bid when there's more demand than supply?
It’s not that there isn’t enough inventory, it’s making sure there’s enough quality inventory. The question is whether it’s the right audience, in the right place, and whether it’s the right content. We have many clients where the content they’re surrounding is just as important as reaching the right person. In some cases, more important. That’s where it gets scarce.
So no inventory quantity problems?
I haven’t directly faced an issue where there wasn’t enough inventory against what we’re trying to purchase. I am encouraged by the number of organizations out there building new content platforms. You even see the traditional publishers, like the Guardian and The New York Times, producing more video content as well. And that gives me more opportunity for video preroll.
But if you’re only thinking of video as preroll, you’re missing all the other places where video could live. It could be in-stream within social ads. There’s a company where the video ends up in-line with the content, so as you’re scrolling through the web page, the video comes in as an expanded unit within the content, and it only opens when you scroll into that spot.