Commentary

The Online Video Upfront

Last week I had the pleasure of spending time with an agency team that represents a worldwide consumer packaged goods brand. The occasion? The group was in the early stages of planning its online video initiatives for the year ahead. Therefore, the team was taking meetings with vendors on its initial consideration list.

 

The structure was simple and direct. Team members asked for a presentation that contained specific elements of online video capabilities, audience composition and new innovations in the pipeline. The next step would be an RFP to a short list of vendors that met the team's qualifications for online video. At the end of the process, this team will endeavor to lock in a high percentage of online video needs for 2009-2010 on an upfront basis.

I came away really impressed with this company's strategic approach for online video planning, and wondered why more agencies and marketers don't take the time to do this.

Online video spending is projected to grow by 29.8% this year (this is a Zenith Optimedia statistic that is relatively consistent with other sources out there). And while professionally produced inventory has grown substantially (25% in 2008 according to MediaPost), there is still a level of  scarcity that is driving ad rates higher on Hulu.com and TV.com year-over-year and in comparison to television spots. It's quite incredible when you juxtapose it against reports of declining rates for other ad formats such as display and even search.

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In addition to being able to lock in inventory, conducting an online video upfront has a few key advantages:

First look at new offerings and content schedules. For the brand marketer buying on an integrated basis, this is nothing new. Much of the online video market is purchased on a reserve basis this way. However, there are often opportunities that can be found across the broader spectrum of online-centric publishers and ad networks that can be used to build additional quality reach during those times that messaging is in-market.

Early look at new capabilities. The pace of innovation has completely changed the online video space in the past year. Many "holes" that existed in tracking and reporting interactions have been filled thanks to new player plug-ins and ad serving systems. Not to mention experimental ad products like overlays, full- and half-page ads. An upfront process should include a view of product schedule, and perhaps even requests to be part of beta tests.

Pricing benefits. Despite the recent Hulu rate scare, there are still plenty of areas to leverage and buy in-stream and in-banner video in a cost-effective manner. Leveraging an upfront commitment is the best way to secure optimal pricing during the most important time periods. Remember that Q4 will be here before you know it!

When you review the list above, I can't see a reason not to engage the marketplace to identify the best opportunities for your clients over the next 12 months. Be specific in your requirements and objectives, and you should be rewarded with excellent ideas to build your video strategy into 2010.

3 comments about "The Online Video Upfront".
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  1. Keith Treco from Goodmail Systems, June 29, 2009 at 2:49 p.m.

    Great article, Eric. I'd like to add that the ability to now send video over email with assured inbox delivery has also become very compelling. This may be a shameless plug, since my company offers this, but I think it's important to note that brands can now integrate the targeting power of email with the buzz factor and stickiness of video. This has opened up new revenue opportunities for publishers, ad networks, etc. Something to consider when making an ad buy or when determining how to best use your video assets.

  2. Scott Broomfield from Veeple, Inc., June 29, 2009 at 6:01 p.m.

    Two quick points.

    1. The new IOVP solutions incorporate functionality that enages and measures the engagement.

    2. Keep in mind that ad insertion is only one of the four main reasons for OV; the others being eMarketing/eBranding, eLearning/eTraining, ePromotion (self, not others) and Scoial Networking.

    The entire OV marketplace is becomming a rich medium fro self-expression and storytelling.

  3. Pinaki Saha from Me!Box Media Inc., July 10, 2009 at 11:21 a.m.

    Hi Eric,

    Nice post and thoughtful inputs.

    What we are observing in the market is that there is a significant difference between pure entertainment content (box office) and purposeful content (brand content like that coming out of P&G and similar ones). The engagement conduit for both the kinds have dissimilar funnel size and form factor.

    While consumers seeking entertainment content are engaging across diverse product placements and are willing to absorb some amount of pre-rolls and mid-rolls (Hulu likes), the purposeful content seekers are highly focused and are trying to derive meaningful and insightful knowledge as takeaway and are least likely to waste time in other form factors or formats if embedded alongside.

    Hence, the out-the-door strategies for the two different kinds of producers need to be folded into any upfront model to create highest utilization.

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