• by Jim Meskauskas , July 14, 2004

Two weeks ago in this space I talked about the potential gains against audiences such as myself, which are admittedly not the norm, advertisers might yield by putting their ads on their websites.

As many of us can see, having video formats in some form or another, is going to be commonplace on the Web, in spite of admonishment from the most elite digerati that doing so is not using the medium in ways that cater best to its strengths. And I agree with this position. But like it or not, we are going to see more and more streamed audio-visual content on the Web.

It's getting easier to do, clients are becoming more receptive to repurposing their TV spots to run online, and audiences are objecting to it less and less.

A reader of this publication, Suzie Reider, Vice President Sales and Marketing for Gamespot, wrote to me and suggested that the online advertising industry needs to give more attention to the governance of online streaming advertising.

Something the industry needs to consider as more and more advertisers move to stream their commercial content rather than run banner ads is just how will we govern this activity. In what ways will advertisers be able to buy it?

The current IAB/AAAAs Standard Terms and Conditions currently deal exclusively with banner ads run against contracts of one-year's duration or less. We are certainly going to have to deal with the issue you raise sooner rather than later.

And as far as the currency for video on the Web, is trying to sell "impressions" really the right way to go?

It is true that if TV ads were held to the same standards I've heard some agencies want to hold online video to it would have sunk television as a medium a long time ago.

What kind of currency would make both parties on the same page and being fairly compensated?

Something to keep in mind as the industry develops, if it is so inclined, a usable currency for streaming media, reconciliation between networks and/or stations with the advertiser was, and still is based on whether an entire ad ran. The ad being watched has always been indeterminate and so compensation for advertising inventory has always been against Opportunity To See rather than "actually seen."

With television, the viewer may have control over whether or not they engage the content, but they do not control its means of distribution; the ad still runs whether an individual watches it or not.

The problem with online in relation to audio-visual content of the sort found on TV is that the viewer has control over both their own attention AND the means of distribution. A viewer can literally shut down the content stream and render it null.

When one asks of television: "If a tree falls in a forest and no one is there to hear it, does it make a sound?," the answer is "yes." Ask the same thing of online and the answer is "no."

With television, print, radio and, all other media in fact, what advertisers really pay for is ACCESS to an audience. There are no real guarantees that the audiences an advertiser intends to reach are actually reached. Sure, there are some guarantees that are delivered "ex post facto" based on miniscule samples that are supposedly attributable to audiences a magnitude larger than those samples and over more than 100 points of medium engagement (i.e., channels and their programs). That's what Nielsen ratings are supposed to be. But with online, the technology is already in place to actually verify engagement at the user level. So what do we do?

Sites that start to offer with greater frequency a "broadcast" opportunity for their advertisers are going to have to figure out whether they want to charge based on complete delivery of ad content, partial delivery, or simply access to the audience. All of these things need to be priced differently and advertisers need to be prepared for that kind of tiered exchange for a varying level of delivery.

So the way this would work is that simple access to an audience comes at the lowest rate, and is based on a unique visitor count not unlike paying for a guaranteed rate base for a magazine. A mid-range price is paid for partial stream delivery, higher than the "rate-base CPM"," so to speak. And finally there is the price for a full stream of the ad, or at least something close to it.

Advertisers should certainly be willing to pay more for actually reaching an individual in a fully accountable way. If TV could demonstrate on a unique viewer basis that an ad run in a program was seen by the intended viewer, don't you think it might actually justify the rates advertisers currently pay only for access to those audiences?

This may not seem like much of an issue now, but I assure you, the issue of streamed content delivery and compensation of the publisher for running it is going to be a problem in the not-too-distant future, and the best way of dealing with the future is to prepare for it.