I first heard the phrase "Syndicated Video Economy" while eating lunch with Will Richmond, the founder of VideoNuze. We were discussing how the distributed power of the Web would eventually produce many large online video businesses. While this turned out be true, a black market has also emerged -- as in all big industries.
The syndicated video black market is dominated by a small number of video syndication firms, ad networks and tier-three publishers, all of which appear to be both codependent and increasingly unscrupulous. I was disappointed over the weekend to receive an email from one of our lead engineers that demonstrated a cleverly hidden ad tactic previously seen only in the display world.
In this black market example, I was shocked to see not one, but six publisher sites appearing in invisible 1x1 pixels hidden behind a banner ad, serving video from a video syndication firm and multiple video ads from Coke, Verizon and others served by two video ad networks.
So how can advertisers avoid participating in this black market economy? Here are five tips:
1. Demand site-by-site reporting. Nothing ferrets out a bad actor more quickly than asking for site-by-site reporting. Site verification is a good step, but it is only a half solution. If a vendor refuses to provide site-by-site reporting, simply walk away. If you do get it, beware of names that are not actually sites but a collection of sites or another syndicator that requires another site list.
2. Pay less for content in syndication. We all understand the paradigm of risk vs. reward, and syndicated content clearly has a higher risk. Our internal research clearly shows that syndicated content is less valuable than content appearing on the content owner's site. Start by paying much less for syndicated content until you are 100% comfortable with the inventory -- or avoid it altogether.
3. Do research. This may sound obvious, but so few agencies and clients do it. Measure the performance of vendors that are syndicated vs. those that aren't, and the performance of onsite content vs. syndicated content.
4. Beware of syndicators that syndicate in display inventory. The video industry is a small space and it is quite easy to find out which companies are buying their video syndication through display inventory. Ask around and if you hear the same name mentioned a few times, avoid those vendors. Nearly every example of the syndicated video black market involves a limited number of vendors, so you don't have to work too hard to avoid the majority of the problems.
5. Remember what your mother said: If it sounds too good to be true, it probably is. When a vendor claims to have millions of availabilities in a narrow DMA target and you can't recall ever seeing their video players on the Web, they're probably going to buy display inventory to create the inventory. Same thing goes when you're hearing pre-roll prices that are 20% of the industry average.
We are maturing as an industry and we need to work together to maintain our collective quality standards. The black market hurts everyone in this business, from publishers and advertisers to ad networks and syndicators. We must come together and address this problem head-on.
If you are interested in working together to create an independent and unbiased organization to shed light on and address these issues, please feel free to contact me directly. We cannot let stream fraud become the click fraud equivalent in online video.