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Interactive Web Videos Show Higher CPMs
The ‘AAAA’ (American Association of Advertising Agencies) published an article, written by Paul Burton, providing a compare and contrast analysis of Digital and traditional media advertising. In affect, the majority of agencies have misunderstandings when grappling the cost-effectiveness of their budgets.
“Advertisers and their agencies are facing an increasing challenge— understanding the operational and economic ramifications of migrating traditional creative and media thinking and approaches into the Digital era. This challenge often creates friction, inefficiency and waste in client/agency relationships as traditional players on either side, or both, apply traditional practices (or expect traditional outcomes) without an understanding of very different Digital norms and economics.”
When Digital advertising emerged, it was primarily banner advertising. It now includes web video, due to increased bandwidth adoption, faster computers, and a prevalence of development frameworks making it easier to create. “The advances combine to drive true interactivity; the ability for content providers to interact real time with users and consumers, and to track and analyze that data to improve future interactions.” Yet, as Burton takes note, the goal is attract the ‘avoiders,’ those that time-shift, place-shift, and simply do anything they can to avoid advertisements.
Users, or your potential audience, adapt to new technologies. Advertising must do so as well. Digital culture is proactive at taking, altering, and sharing content; they take and enter information, as well as increasingly spending more time on average watching than traditional media, primarily because Digital is anchored to their computers and mobile devices.
Within web video, “the emergence of ad networks has helped to close the gap, but generally for carpet-bombing placements versus strategic, innovative partnerships.” Simply put, advertisers are slapping traditional media adverts on web video, automating it through ad networks, and calling it a day. The infamous post and pre roll legacy continues, but it simply isn’t innovative; and, this article hints it’s merely a nascent step.
CPM (cost per 1000 impressions) comparison
The myth is Digital is cheaper. In fact, it’s more expensive in terms of its effectiveness to measure, target, and track than traditional media. In turn, greater value can be delivered. The CPM (cost per 1000 impressions) for Digital media now commands a premium due to its ability to better target, measure and optimize than traditional media.
At Quick.tv, we’re taking video further by making it interactive. It’s not about attaching advertisements like most companies are doing; it’s about dynamically enhancing video to command the instinct of the Digital culture to take and enter information, engage and share with video. It’s about making your audience lean forward than lean back, all the while commanding a higher CPM, if done correctly.
One Response to "Interactive Web Videos Show Higher CPMs"
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Jack
Big difference between theory and practice here. These stats paint a nice picture for your investors/prospective clients but have no grounding in what actually happens in the real world. I’ve been working in this (interactive online video space) for a couple of years and clients with any amount of scale require online video ads to match their TV CPMs which – in the UK at least – are IRO £3. That’s not a typo. £3 rather than £30.
It’s a bit like ITV touting CPMs of £40 (which they did for the first couple of years of running video). £40 looks great on spreadsheets and in boad meetings but the worst kept secret was that they were selling a lot of inventory at about £2CPM. Did some deals for clients on that basis myself.
This is the difference between ‘rate card’ and what people actually pay.
April 14th, 2009
Alexander
Jack,
Thanks for the reply. You’re definitely correct about theory and practice regarding the status quo. We’re looking to change the status quo. Frankly, we love to bring up these issues regarding the whole video market, to detail what is possible giving global video viewership.
Yet CPMs will be low for companies if they think internet video is TV. Agencies are using the traditional TV model and tossing it online for any video than just television shows and advertisers and marketers are starting to see its not paying off for most. Audiences behave differently.
If it’s done correctly, CPMs jump and advertisers line up because their total cost is lower with better value, even if the CPM is a premium. Hulu for example is showing great strides. Outside the topic, but proving the point: LinkedIN commands a premium CPM for their advertisements in the social networking industry, yet larger competitors like Facebook and MySpace have CPMs that are quite small.
Have you tried out our beta? If not, don’t hesitate to reply. We love to get tweets.
Alexander Horré
Quick.tv
April 14th, 2009
Jack
Thanks for the reply Alex. You make a good point, but I worry that you’ve got too big a job on your hands if it involves ground-up reeducation of the advertising industry. Online video isn’t so much the preserve of ‘digital’ ad execs now; more often it falls under the remit of TV folk (or at least people with TV buying backgrounds). They seem to want cheap reach, or at least a good deal. ‘Premium’ inventory is a rare exception nowadays, particular in the mind of buyers
I’ve tried your BETA and it’s a nice product; slick design. I guess it compares very closely to Veeple?
April 14th, 2009
Nick Bell
Jack,
I agree. I my experience media buyers want to see digital estate with big numbers (uniques, impressions etc.) yet only want to buy a small % of this inventory – which never really made a lot of sense to me. I guess this is a legacy from traditional media days where eyeballs and “circulation” where almost equal.
The reality I have experienced for the past 10 years and something I always advise people when putting together projections is to divide the rate card CPM by 10 !
Quick.tv’s aim is to provide tools for our users to maximise ROI of their video assets outside/alongside the traditional advertising CPM model.
N
April 14th, 2009
mattymoran
Interactive Web Videos Show Higher CPMs | Quick.tv Blog http://bit.ly/17hdNY
This comment was originally posted on Twitter
April 14th, 2009