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.
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.