You Get What You Pay For

by Andrew Budkofsky, Jan 31, 2012, 1:23 PM

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The trades have recently reported that the cost of a 30-second spot for this year’s big game as $3.5 million.  Big-name advertisers, including many auto companies, all have secured time. It’s become almost a must-buy. Why?  Because it will be the biggest television event of the year.  The ratings will be enormous, and the country will be talking about the commercials for a week after the game.  The notoriety and brand awareness that clients generate is worth the price.

Sports, in general, are priced above most other forms of programming, as big ratings and large target audiences offer a great way to get rating points.  Clients and agencies have valued the various leagues, games, etc. and segmented them out so they can price them accordingly.  For example, NFL games are more expensive than NHL games.  Major conference Division I games are more expensive on a national basis than Division II leagues and so on.

So when will the next biggest video medium follow suit?  When will clients and agencies begin to segment out digital video? 

Premium content should be priced at one level, and the long tail of video should be priced at a lower level.  The difference, though, is that in television, clients know what they’re getting.  Unfortunately, in the digital video space, if you’re going to buy video at less than $8, you’re going to get what you pay for -- in banner video, auto play, below the fold, with numerous players on the page of a website you’ve never heard of and wouldn’t have considered in the first place.

I spoke to a senior vice president and group media director who has been buying digital video as a daypart for a Fortune 500 account for the past year.  She said that she knows it’s impossible to be getting quality inventory with the CPMs she’s been buying, and she’s beginning to segment out her buys the way she does on television.

Digital video will continue to try to be modeled this way.  One such example is Domino’s pizza. The company runs television commercials during the early fringe daypart because it knows that’s a strategic time of the day when people are deciding what they’re having for dinner. 

Shouldn’t Domino’s be able to buy digital video the same way?  Will we eventually see pricing for video broken out by daypart the same way as television?  It only makes sense that we would, but the fact remains that this is still not the case today. 

When will more agencies and clients follow suit?  When will they all begin to segment and daypart digital video? 

After all, you truly do get what you pay for. 

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