Ad Nets Hungry For Premium Video Inventory

by , Jul 18, 2011, 8:39 PM
  • Comment (1)
  • Recommend (7)
Subscribe to Online Media Daily
One of the main accusations levied at display ad networks -- namely, that they served to commoditize display ad inventory, driving prices down to destructively low levels -- is not an issue with second-generation networks dealing in video ad inventory, according to executives in the Video Ad Networks panel convened by MediaPost at the OMMA Ad Networks conference on Monday afternoon.

But this raises problems in itself, especially when it comes to persuading publishers to make premium inventory available through networks -- and persuading advertisers to buy it there.

Video ad networks have succeeded in a couple of key areas -- especially in terms of scale, optimization and targeting -- but the effect on video inventory pricing has been much less dramatic than display nets. According to Amy Richards, chief marketing officer at TubeMogul, that's a good thing: "If we treat them all like exchanges and drive down the prices, it's pointless, because no publisher will participate in that."

Jason Krebs, SVP and chief media officer for Tremor Video, confirmed: "Honestly, we pay more to publishers for premium inventory than anyone would in an exchange environment," adding: "I don't know anyone who has premium video inventory who isn't sold out."

(Average CPM for video advertising was $10-$20 in 2007-2008, according to a number of sources, and is still around $10-$15 in 2010-2011, despite a major recession and continuing economic woes.)

In other words, publishers still hold most of the cards when it comes to the economics of online video inventory -- and despite the demand, they're exercising restraint when it comes to creating new inventory, according to Amy Richards, chief marketing officer at TubeMogul, who said most video publishers understand that "Creating inventory for the sake of having more inventory is not necessarily a good thing." This discipline extends to withholding unsold inventory to maintain a price floor, according to Krebs, who described this as "strategically perishable inventory."

Of course, this also means that big advertisers may be hesitant to buy premium inventory through ad networks -- traditionally dominated by remaindered inventory -- as opposed to a more traditional human sales force. Brian Mandelbaum, vice president of platform development for AdoTube, conceded that "there's great quality content," but said it was an open question whether "it will ever get to the point where you're comfortable spending significant budgets with networks."

Specifically, Mandelbaum touted AdoTube's model, which promises no "blind impressions" on unknown sites, as a key step to any kind of premium ad sales model. Kat Chung, digital supervisor with Initiative, echoed this demand: "Having a relationship with the network where you can look at the performance of each site is obviously important" -- adding that DSPs may be a better fit for premium video. While optimistic about networks, Krebs was more pessimistic about the prospect of premium video inventory moving to exchanges on a large scale, in large part because exchanges don't offer tools for preserving price points: "Honestly, I don't see it happening."

One viable alternative is the private exchange, according to TubeMogul's Richards, who said: "In the video space the private exchange makes a lot of sense, because it allows a direct connection between the publisher... and the buying party, and being able to incorporate targeting and optimization and all the things that exchange types hype." Whatever the venue, the other panelists agreed with Richards that another crucial element in success must be to "leverage superior targeting -- whether it's through an exchange, or direct through a DSP."

1 comment on "Ad Nets Hungry For Premium Video Inventory".

  1. Jason Krebs from Maker
    commented on: July 18, 2011 at 10:28 p.m.

    When I said "Honestly, I don't see it happening" I was referring to premium video inventory moving to video EXCHANGES.

    I am OPTIMISTIC about premium video inventory moving to networks on a large scale. After all, that is what we do, and as I noted, we are the largest buyer of premium video inventory 2nd only to Hulu.

    It was a great conference, thanks for covering it Erik!

Leave a Comment

Sign in to leave a comment. Don't have an account? Join Now

Recent Online Media Daily Articles

>> Online Media Daily Archives