• by Alex Rowland , May 11, 2010

There has been a lot of attention paid to online video advertising over the past several years.  With the explosive growth in consumption and subsequent influx of cash, the number of video ad delivery vehicles has increased and the pricing for these units has been all over the map.  This can be incredibly confusing and frustrating for anyone buying media in this space.  Why are prices for each unit so divergent?  How can I better determine if what I am buying is worth the investment?  Answering these questions becomes much easier if we look at the foundations for pricing in video and work to evaluate the relative importance of these foundations to your brand goal.  

While there are many ancillary factors that can impact price, the primary drivers in video are viewer intent and attention.  Intent can be defined as a measurement of how interested the viewer was in the content when they started watching.  Attention can be defined as simply a measure of how much of the user's focus was captured once the view was initiated.  If you evaluate each different video advertising option under this matrix, understanding price disparity gets a little easier.  

Let's take in-banner autoplay video.  This ad unit may capture slightly more attention than a standard display unit, but there is virtually no intent.  Pre-roll has similarly low levels of intent, but captures substantially more of the viewer's attention because it sits between the viewer and the video she wants to watch.  Moving further up the pricing scale, virtual currency and gaming platforms have begun offering incentivized views that enable users to watch an ad to completion in exchange for receiving virtual currency or in-game items.  Each of these units is progressively more expensive because they deliver more attention, but they still do not generate high levels of intent.

Only by moving to Click2Play units do you begin to see user intent as a significant factor in the value (and price) of an ad impression.  Intent can be important, especially given the evolving social contract with consumers on the Web.  A user who has elected to watch an advertisement is going to be engaged in a way that a traditional form of interruptive advertising will find very difficult to match.  There's a reason why YouTube charges 20 cents to $1 or higher per video view for these types of engagements.  When you bring high levels of user intent together with high levels of attention, you create a highly valuable interaction with your viewer.  This appears to be one of the seminal conclusions of Vivaki's recent study in which the Ad Selector unit pioneered by Hulu (in which consumers can choose which ad to watch) scored dramatic improvements in click-through and recall rates.  

As Web video advertising continues to evolve, new ad units will continue to emerge.  When evaluating a buy for a new type of unit, it's always helpful to evaluate price based upon the level of attention and intent generated by the placement.  And given the magnitude of price difference between these units, be sure that you are actually receiving the unit for which you paid a heavy premium.  For example, networks will sometimes offer "blended" campaigns that mix Click2Play and Autoplay.  These units differ dramatically in value -- and unless the network can provide a precise breakdown of the viewership by publisher and by unit, assume that the vast majority of the views are occurring Autoplay In-banner across a network of mid-tier publishers. 

Over time the relative value of each type of user interaction will become clearer, and pricing will begin to become a little more standardized.  Until then, trying different placements can give you the information necessary to buy cost-effectively and identify unique opportunities that generate maximum impact for your brand at a fair price.  Users want to see brands think a little more creatively than the standard repurposed 30-second television spot.  Give them the interaction they want.