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Professional content remains the "gold standard" as far as attracting marketing dollars, and that combined with scale makes TV hard to beat. But interesting stats show that supply and viewer consumption are rapidly increasing. We hypothesized that this trend will result in a natural decrease in CPMs and will be a major driver in the shift of TV dollars to online video.
I recommend checking out the comments section of the post for an interesting discussion by the Video Insider community on what really needs to change. Apparently, an increase in supply is only the tip of the iceberg. This writer does not disagree.
Almost universally, the community agrees that an equally important element that should ultimately push online over the edge is its inherent ability to do what TV cannot: audience targeting -- be it behavioral, demo, contextual, self-selection, or any of the other ways to identify marketer prospects --- against the uniquely engaging format of online video. Add in advanced forms of measurement and analytics to prove ROI beyond transactional metrics. Let scale work itself out, and the dollars will come pouring in.
Or will they?
A couple of commenters brought up an interesting point: in an environment of TV spots being TiVoed out and declining ROI and online catching up, TV may still win out. TV is the safe choice, and one that has worked, albeit with declining ROI, for years. "No one ever got fired for buying (insert top rated show)," as the saying goes. So what might need to happen? Phil Guest of Sulake said it very well: "Times are a changing, though, as the next generation of marketers and media execs become the decision makers rather than influencers they are today. The shift that sees digital as the starting point for communications planning is well under way, one day we might wake up and realize it is here."
Is it a generational shift that needs to happen, rather than a shift in supply and technology? What do you think?
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The debate rages on over the shift-in-share for long-form video (TV vs. online). I side with online for its' ability to:
* address smaller, highly targeted and more finely-granulated niches economically * to interact with consumers in real time * to embrace forms of monetization that television cannot touch
These forces have engendered an ever-increasing universal explosion of online long-form content professionally-produced on modest budgets, caused TV eyeball-minute counts to decrease, and led original long-form television production budgets to long-term decline. At the same time, big brands (who represent the lion's share of TV advertisers) have slashed their advertising budgets. A perfect storm is brewing.
The champions of original online video see the battle rooted in the race to the ultimate consumer experience in integrated and personalized video services (see: http://bit.ly/6O2P6 ).
The champions of TV extoll the scale of distribution, but forget the higher distribution and carriage costs, which go upside down fast when viewership declines. Original TV series budgeted at more than $2 million per episodic hour will decrease in number or be re-invented on streamlined budgets (which might erode viewer interest). What will happen when the internet produces great long-form original video at costs lower than $200,000 per hour? Let's get real about the economies-of-scale when an entertainment enterprise is built on shifting sands (see: http://bit.ly/PVID ).
read more: http://bit.ly/Nc4NF
Broadband on-demand media access over the last couple of years has come through like a wave of disruptive innovations packaged together over a finite span of time. It will depend more on how our consumers change their lifestyles, habits, aspirations, and needs along with socio-economic macro events and re-define their consumption nature. The balance between PULL and PUSH is paramount. The key to success will be how leaders of our time observe and analyze every instance of user behavior deltas and forecast trends ahead of the curve. However, they still have to manipulate their product line depending upon what infrastructure bottlenecks are current.
It's all about seeing the stakeholders through a kaleidoscope of benefit matrix and coming up with solutions that engage one with the other more rapidly.
First, online TV shops have the ability to create quality content at a fraction of the cost of traditional TV. This gives online shops the ability to create unique segments tailored specifically for a particular advertiser without a huge increase in price. Additionally, experienced online TV shops can expand the functionality of a campaign by tapping into video ad networks. For example, DadLabs can host a monthly sponsorship that includes pre-roll/post-roll sponsorship call outs, brand identification, in-video product placement, etc. etc. In addition, DadLabs can create custom brand promotion videos and syndicate them worldwide using video ad networks such as YuMe and Tremor.
Essentially, a small online TV shop can become a complete interactive marketing solution for any brand looking to gain exposure on the web. Online TV provides high attention rates with niche markets at an affordable and scalable rate. That being said, small online TV shops are probably not going to work for the big budget clients Hulu is stealing. However, small shops may attract the marketing dollars from mid-range and regional companies that typically spend their marketing budget on local news stations.
John Fowler – john@dadlabs.com www.dadlabs.com
The MTV, Discovery, Scripps, A&E Nets have built Cable channels that skew to a specific niche demo. The programming varies in genre but skews to the core audience. These networks deliver the core niche audience 365-24/7. The Broadcast Nets do not have a distinct brand model. They are Old Media that has lost its way with its One Stop Shopping. Cable continues to add share of audience vs Broadcast.
Cable TV will be next in line on the food chain as Video dollars move from Broadcast. Online Video will continue to grow at a double digit pace while Cable will continue to grow in the low single digits. As the Cable Nets add to their On Line war chests, they will also be the beneficiary of addition Video budgets. Big Brands will continue to purchase bundled Video (TV & On Line)from the Cable nets. Cable can deliver a niche TV demo audience and will upgrade their online targeting capabilities.
All Video budgets from TV are not created equal. The Broadcast Nets loss will continue to move through the media funnel from Cable to Syndication to On Line.
Jim Courtright Big Thinking By The Hour, Inc. jc@bigthinkingbythehour.com
I'll be fascinated to see a campaign for a major product (or what a marketer hopes will be one) that entirely forgoes mass media in favor of the ultra-targeted, ultra-measurable techno-platforms. Can that campaign really deliver not just the sales, but the cultural impact of the great mass media campaigns that created lasting impressions and successful brands? That will be the real test of whether they are truly ready for prime time, and whether the big shift has happened.