Thursday, February 5, 2009

Video Insider: Audience Versus Ad Efficacy: Moving Advertising To Digital Video

Audience Versus Ad Efficacy: Moving Advertising To Digital Video

IT SEEMS NOT A FORTNIGHT goes by without a discussion on digital video ad efficacy, ad format standards and the debate on whether it's better to measure ROI through direct response, or if the harder-to-measure brand lift is more important. Many of us are charging hard to demonstrate advertising efficacy et al. within our solutions: CPC as the new and improved sales model, while NASA-like-quantification ROI models and reporting tools are at the top of our sales tools box. But are all these concepts and capabilities really the right way to go into battle today to win the war on moving television advertising dollars to digital video?

Over many years, television has been fruitfully selling audience. Agencies understand this concept, what they are buying, and how to sell audience to advertisers. Television advertising has no real ROI measurement, except the nebulous ratings-based one, and given that MSOs are really conglomerations of many independent neighborhood businesses -- despite all the noise about Canoe -- it is doubtful that there will be quantifiable Internet-style measurement as we know it for many years to come.

We know consumers watch online, but why are we still not getting the television ad dollars shifted? Why does television continue to be the favored medium for advertisers -- and what can we learn from that fact?

Television speaks a different language. Its representatives talk about audience and demographics, while we talk about CPC. Television tells agencies about the marketing value, while we tell agencies about the ROI. So who is right? The answer is: They are! The proof is in the dollars. Furthermore, digital video sites that are building successful businesses vis-à-vis ad revenue are selling a focused, coveted audience that specific advertisers want to reach. For example, Hulu and have attracted the coveted younger male with spending-power demographic. These very successful digital video publishers sell audience just as the cable networks do.

I'm not saying that ad measurement and reporting metrics aren't important. In fact, I believe targeting and ad efficacy will ultimately be the deciding factors in the war for television dollars. But the first battle has to be won by getting the dollars into digital video by selling audience to agencies and advertisers. And once we're selling audience, we're on a level playing field with television. Then, and only then, can we win the war and see the dollars flow more generously into digital video.



We're looking to add more regular contributors to two MediaPost columns: Video Insider and Online Publishing Insider. If you think you can write insightful commentary and analysis on the state of the video and/or online publishing industry, please send a sample idea and your credentials to Phyllis Fine, Columns Editor, at (Please note: We ask columnists to avoid self-promotion.)

Steve Robinson is CEO of Panache, which offers an ad-insertion platform that provides major media and entertainment companies with the infrastructure to generate and increase revenues in their movement of video to the Internet.

Video Insider for Thursday, February 5, 2009:

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