Commentary
'Worlds Are Colliding'
- by May 20, 2010
Like many men now in their 30s or 40s who lived in New York City in the '90s watching at least ten hours of TV per week, I still quote lines from "Seinfeld" in everyday conversation. This column's title comes from an episode where George Costanza is upset that his world with his friends is colliding with his very separate world with his girlfriend. Depending on your love of "Seinfeld," hilarity ensues as George tries to keep his friends apart from his girlfriend so the George known to his girlfriend does not "kill Independent George."
I've had that episode pop in my head many times since I joined digital video network Smartclip. For the past 13 years, I have been focused on online advertising, and before that I was a part of the TV world. I miss the people from the national TV ad marketplace and the simplicity of buying and selling. Not that the people in TV are simple of course, but it was nice to buy $3 million of media over the phone after a week of negotiations and then simply get the follow-up letter from the sales rep confirming the buy a few days later. Creative was delivered on time, campaigns started and ended on time, and everyone agreed on how ratings were measured. As they say on the "Saturday Night Live" sketch "Delicious Dish": "Good times, good times."
I had flashbacks to that world last fall when I was lucky enough to attend the farewell party for BBDO/OMD/PHD icon Steve Grubbs, who was one of two people responsible for letting me drop some TV clients and start BBDO's online media buying practice in '95. Of the 75 people at the party, I was probably one of a few not still in the national TV business. Yes, the TV business has changed in some ways over the past 10+ years as I learn when talking with my old colleagues, but obviously nothing like the constantly evolving world of online. It was amazing to see how separate our jobs had been over the years even though we perform the same core roles, just in different media.
There are some signs, however, that TV and online people are starting to work together and understand each other's business. In the last week of TV upfront presentations, we're seeing more-integrated sales teams getting better at packaging TV and online inventory, assigning proper value and not just throwing in online as added value, as TV billboards get tossed in with :30s.
More specific to the world of online video, we now have a large enough audience, thanks to broadband penetration and content delivery platforms, that online video inventory is starting to get tangible enough to make a real impact for clients and justify some budget shifts. And measurement firms are starting to build tools that can truly help agencies and clients measure key variables like reach, frequency, and ad effectiveness for TV and online. But there are still too many silos in every organization across the ecosystem.
In Germany, our parent company is seeing about half of its revenue this year coming from TV budgets. How can networks like ours get to that point here in the U.S.? I'd like to hear from you on challenges and successes at your firms.
And as our online advertising industry continues to mature, hopefully we can still hang onto what we love about Independent George.
If TV people are understanding online more, it will be a very good thing for them, since it is a matter of their survival. On the other side of the coin, there needs to be better understanding of how to incorporate TV images and content into online formats; if TV was considered "small screen", then online is "micro screen" due to the proliferation of devices with variously small screens that carry online content. That is a significant challenge to both TV content providers and online advertisers/content providers. Advertisers moreso, since they are the ones footing the bill for everybody.
The distinction between my TV set and my video monitor is evaporating before my eyes. I now watch TV on my iPad and I don't think, "is this my TV or is this my computer?" Broadcast TV and broadband video are changing each other... it's not a matter of the TV industry understanding the online world. The TV industry has already brought it's own models online (Hulu.com). The big difference between what Hulu does and what everyone else does simply comes down to interstitial commercials. Pundits who continue to deride the 30 second spot and praise the superiority of online video ignore the fact that most online video is all short form content, usually user generated with zero budget... not exactly compelling content. The online world should pay more attention to what TV is doing and not assume that online models are superior.
Like Matt, I’m also a CEO of an online video network. Previously, I’ve seen a fairly large disconnect between the “online buyers” and the TV buyers – obviously in terms of budgets, but also in terms of methods and psychology. In the past, online budgets got applied to everything from banners to pre-roll to email, which made it practically impossible to ever see video ads really grow because the dramatically higher CPM’s (for pre-roll) meant that a buyer could either spread their tiny online budget across multiple platforms and networks (resulting in a proportionally microscopic video buy), or they could blow everything on a what amounted to a very tiny pre-roll campaign – relative to their internal counterparts over in TV…
In other words, online buyers were like kids in a big candy store who’d just been given $5.00 by their parents, and they we’re not about to “waste it all” on just one type of candy – even if it was the best bang for their buck. Moreover, (with rare exceptions, such as Matt), online buyers were not transplanted TV buyers – they were relatively young kids who simply didn’t understand video advertising (e.g., often trying to shoehorn pre-roll into CPC, or some other inappropriate “direct response” measuring stick).
Today that’s beginning to slowly change; however, for online video advertising to finally take its proper place in the spending pie (relative to consumer media consumption in the US), budgets for pre-roll, post-roll, etc., must be taken completely out of the hands of the designated “online buyer” and incorporated into the single category of “video” while simultaneously the TV buyer (newly renamed the “video buyer”) needs to stop looking down his/her nose at pre-roll and start learning about this little thing called the Internet…
Why do I think this is the only way we’re going to finally start seeing “real” budget allocation for online video ads (in the US)? Because Toyota and/or Zenith/Optimedia is NEVER going to hand over control of a billion dollar TV budget to a 29 year old online whiz kid – no matter how much he or she knows about the latest ad technologies and ROI tracking models…
Ironically, online video must be separated entirely from the purview of the online buyer…
In the meantime, the only real solution is to either grow an online video channel or network large enough to justify the cost of holding its own “Upfront” in NY each May, or creating a syndicate of similar ad networks who can somehow play nicely together long enough to create an ad bazaar that is legitimately competitive to the television Upfront, or have the luxury of already having online video inventory incorporated into TV sales presentations; (e.g., ESPN.com, et al.).
Until the aforementioned events happen at scale, the expansion rate of online video advertising will be measured in the hundreds of millions each year instead of the billions (that it should be).
Having said this, I’m open to any and all ideas!
Best,
Richard Gillam
Anyone reading this post catch the buzz of 12 year old Greyson Chance singing a Lady Gaga song?
I try to stay current so I can stay connected to my young nephews and nieces so I go to You Tube to watch this video and the video starts, stops, stutters and I tune out. You online video guys talk about the penetration of broadband as if the technical issue I encountered never occurs. I think online video can be great, but I think clients in their lives as consumer, experience a video online that doesn't play correctly and then look at their TV and say "that never happens when I watch Seinfeld."
I think online video's technical issues compared with the viewing experience of television, silently contribute to a perception problem stunting the growth of this sector.
Matt nice piece -- thanks for sharing your vast experience -- I hope you continue to do so.
Best,
Ari