• by John R. Osborn , Op-Ed Contributor, January 9, 2014

In my December  piece, I identified three important 2013 advances in the T/V (Television/Video) ecosystem that will have favorable impact on the emerging ad-supported business model:

• The Cross-Platform GRP
• Online Video Viewability
• Buying on a Cost-Per-View (CPV) Basis

In addition to continued gains in those areas, here are three things I’d like to be able to recognize and be excited about at the end of 2014:

1.   The decline of multicommercial T/V advertising “pods” and adoption of a “one for one” approach. My heart sank on reading a recent announcement that LiveRail has invested resources in “unzipping video ad pods for rtb.” This indicates there is still publisher-side intent out there to use technologies to cluster ads together in a way that, in the words of the release, “gives viewers a TV-like experience.” I must once again question the value in interrupting the viewer’s content consumption experience with a string of ads clustered together.

Is running more ads for more revenue really misguided? In a digital world, I believe that video audiences have tolerance limits for the quantity and the methods of media ad-exposure. This has been demonstrated and recognized in the fact that even traditional television providers often deliver long-form content online (Hulu, stand-alone websites) and even through cable-box VOD with much smaller commercial loads than their linear, distribution channels (I measured this in November 2011).

To go back to the idea that clustering more commercials together actually serves viewers or advertisers is inherently faulty. Lengthy ad clutter promotes pod and ad avoidance. I don’t think viewers necessarily want to avoid all advertising, but they are justified in wanting to avoid being subjected to mind-numbing five-minute “breaks” (there’s an oxymoron) with an unreasonable number of ad messages (do the math for :15 units).

I believe as much revenue can be earned with a “quid pro quo” approach, where viewers exchange attention for one or a very limited ad message (no more than one to two minutes for long-form programs and 15 – 20 seconds for short-form video) and then receive the content they seek without further interruption. 

Here’s how:

2.   Ad pricing based on the value of improving the relationship between viewer and advertiser. Two players in the ecosystem have the power to lead a beneficial change to the old model, by using the evaluation tools in the programmatic and RTB arena and other places to understand that not all ad units are created, nor should be priced, equally.

• Content providers can offer a better user experience and a chance for viewers to willingly give their attention to ads because those consumers value the content that the ads provide. This increase in value should be reflected in ad pricing models.
• Advertisers can support this better user experience and gain targetability, viewability and verified completed views, and bring back lost audience attention to their messages by agreeing to value and pay for these improvements at higher cross platform costs-per-thousand.  Advertisers will not receive less for this “higher CPM,” since smart buyers select and run more targeted ads that are actually seen.

These approaches will be far more effective and measurable than the hit-or-miss, see what sticks approach now used in linear TV.

Way back when, a viewer knew which advertiser sponsored a television program, since it was announced that “this program is brought to you by” Jello or other valued brands. It’s time to reclaim those kinds of relationships.

3.   All T/V stakeholders forge a new “age of transparency. ” The three advances in 2013 suggest that transparency is highly valued in the buying and selling of T/V advertising.  All that needs to happen now is for players to realize that transparency is a two-way street, and the entire business of ad-supported T/V will rise with any increased transparency levels that the industry is willing to embrace. Big Data, programmatic premium, programmatic and RTB buying exchanges can simplify and make the marketplace much more efficient in the coming years.  To enjoy the rising-tide effects of greater transparency:

• Advertisers need to know exactly what they are buying, where, and how it will be presented in a verifiable way.
• Media companies, producers and distributors deserve to know what advertisers are signing on to their content sites, what they are paying, and what the intermediary companies are being paid.
• Advertisers and media companies should also be able to target viewers through a standardized, transparent and easily understood privacy policy to optimize the value of advertising and keep the costs of content acceptably low for consumers. In the end, consumers should know who is allowing them free or reduced-cost access to the T/V content they seek, and how these companies are using consumers’ personal or behavioral data in ad-targeting.