Commentary

More On The Big Shift

Is the measure of a MediaPost blogger's performance (hey, we're in the online business, everything is measured, right?) based on the level of conversation he or she can generate with a post? If so, then this writer is reasonably happy with our most recent effort. My last post, "Is The Big Shift Underway?," highlighted some interesting statistics in the growth of professionally produced, long-form video.

 

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.

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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?

7 comments about "More On The Big Shift ".
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  1. Vincent Vandeputte from You View.tv, April 13, 2009 at 3:44 p.m.

    In a sense, posting professional or original content on niche market sites, already is a form of behavioural targeting. Also remember one important thing when talking about the Online Video revolution: not everyone in the world speaks English. Meaning, Online Video sites with Original Content also need to adress the language issues. We are doing just that on our Original Content Video sites. We have invested in producing over 3.000 Video's. About a thousand Online video's on pregnancy related topics for The Netherlands and approx. the same number for the Belgian counterpart (www.bobolino.nl and www.bobolino.be). We also have over one thousand Original Video Recipes posted on our (Dutch) Michelin Star Cooking site: www.LetsCookit.tv. Thankfully, our business model allows us to invest heavily in producing more Online Video Sites with more Online Video's.

  2. Larry Kramer from Syracuse University, April 13, 2009 at 3:44 p.m.

    TV Content should still win...it's the highest quality content out there that is designed to attract the broadest possible audience. But don't forget that there may be online delivery of TV content even to TV's themselves. So the online distribution system should provide multiple choices to consumers....watch the ads, see the show for free or don't watch any ads and pay for the show (itunes). Either way you will be able to watch the show on your 60 inch plasma. The question is can technology force the user to have to do one or the other. Right now it allows a consumer to have it both ways....watch the show for free and skip through the commercials.

  3. Jim Courtright from Big Thinking By The Hour, April 13, 2009 at 4:57 p.m.

    Is the slow movement of money from traditional media to the Internet a generational or technological issue?
    Let's start with generational. Marshall McLuhan wrote back in the 60's that people use a new medium like the old medium it replaced. That's why some of the first radio broadcasts consisted of an announcer reading of all things, the newspaper. We think the same thing is happening right now in marketing. Most of today's brand managers got their MBAs long before the Internet came along, and they built their careers around CPMs, reach and frequency. That generation is in no hurry to change horses.
    However, the Internet is a medium unlike any other that came before. It can replace print and broadcast media. It allows messaging, interaction, engagement, and purchase all at the same time. It also allows any brand with a website to attract their own audiences, create their own content, and essentially become their own broadcaster.
    To create the next generation of Internet based marketers, it will only take time, along with some experimentation on the part of few bold brands, plus a couple of successful case studies to get the ball rolling. Then look for the old school to come around to the new media school.
    As for the technology part of the equation, of course it will take new targeting and measurement techniques to prove the better ROI of Internet based marketing. But we also think there is another factor. That factor will be the emergence of a new audience aggregation model that has nothing to do with the big media companies, the broadcasters, radio conglomerates, or print publishers. We think in the near future, brands will begin to compete for the same video, audio, and print content that big media now monopolizes. When the Internet allows for any brand's website to become its own broadcast station, why not?

    Jim Courtright
    Big Thinking By The Hour, Inc.
    jc@bigthinkingbythehour.com

  4. Jim Burnette from FreeAllMusic.com, April 13, 2009 at 5:10 p.m.

    After reading numerous comments about On Line Video vs. TV, Broad vs. Niche Audiences is one of the most discussed issues. Cable brought this first wave of Targeting capabilities to the marketplace in the late 1970's. Broadcast TV offers a scalable large audience in Primetime. Cable TV also offers scale in PT but delivers Channels dedicated to a Core Niche audience. Most TV comments on Video Insider have bundled the two together. Broadcast Nets are more like a Portal. ABC, CBS & NBC all tend to target the core A18-49 demo. FOX has continued to covet the A18-34 demo, yet American Idol has continued to skew older. Broadcast Nets are basically a TV Portal where users can view News, Sports, and a Variety of professionally produced Comedies, Dramas, Reality, Game Shows, Talk Shows, etc.

    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.

  5. Peter Contardo from Endavo Media, April 14, 2009 at 5:38 p.m.

    @Jim Courtright, “It also allows any brand with a website to attract their own audiences, create their own content, and essentially become their own broadcaster.” You are absolutely right. The greatest thing about online media is that brands now have the opportunity to connect with their audiences directly and build niche communities around their content. In addition, it’s affordable to even small and emerging brands. The big shift we are talking about is already happening. It's just being driven by the brands that haven't had the resources for traditional media buys and are seizing the opportunity to differentiate by using new media. Once sufficient numbers of mainstream brands start to feel some competitive pressure, they will be forced to "get it" and we'll see an acceleration of this anticipated shift.
    More on attracting new advertising dollars at http://endavomediablog.typepad.com/endavo_media_blog/2009/03/attracting-new-advertising-dollars-online-is-the-great-equalizer.html

  6. Pinaki Saha from Me!Box Media Inc., April 16, 2009 at 1:14 p.m.

    Across all the comments, it appears that there is a strong discussion around the PUSH part of the digital and Internet media distribution practice. Lot of us are emphasizing on how a new group of Internet savvy, multitasking, web-platform familiar leaders will enable the preparation, orientation, presentation, and distribution of TV like content on the web. However, the change may just come from a whole different section of demographics like we see in disruptive innovations.

    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.

  7. Rich Reader from WOMbuzz, April 16, 2009 at 3:20 p.m.

    Big Shift Economics: TV vs. Online Video Fight for Shares, Posture, and Positioning

    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

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