The Oncoming Flight To Quality In Content And Distribution

Given a choice, the largest marketers want to spend a lot more money online and around video than they currently do, Still, all factors being equal, they would choose to advertise alongside content from Traditional Media Companies (TMCs) -- not just networks (NBC, FOX, ABC and CBS) -- but cable companies too (ESPN, VH1, etc) -- content creators that I've long categorized as "super premium" content providers. These companies happen to fear the cannibalization of offline revenues, the proverbial trading of analog dollars for online change, be it pennies, nickels, dimes or quarters (in every sense of the word, there is a wide chasm between a quarter and a dollar, I guess). 

Balancing Reach with Quality

But of course, marketers don't only want quality, they also seek reach.  To reach scale, marketers have stratified ad buying since the advent of the World Wide Web.

While TMCs such as Viacom Digital, Turner, NBC Universal and Hulu all rank in the top 10 U.S. online video properties (according to comScore's March data), the reality is that these four 4 trail
i) pure-play video sites like YouTube and Vevo,
ii) portals such as Yahoo!, MSN or AOL and
iii) the leading social network Facebook.

As a result, while advertisers prefer the TMCs (especially since they already spend a big chunk of the $70 billion annual US television advertising budget with them), online they tend to gravitate towards the portals, pure-play video powerhouses or Facebook, all of whom boast more reach.

Not All Distribution Companies Are Content Creators, but All Super Premium Content Creators Have Distribution

While YouTube, Vevo and Facebook are purely aggregators, all three portals produce a modicum of talent and rely on aggregation from not only super premium content owners but also a new generation of premium producers that mainly produce for the Web.

In fact, unlike the super premium content providers who are concerned with cannibalization of offline revenue, premium providers have (in that regard) the upper hand in that they are disrupting the landscape and can aggressively distribute online.  However, the reality is that by the time the advertisers have allocated their budgets, there simply isn't that much left over for this second class of content.  It's sad, but oh so true.  Indeed, it's not so much that the budgets are depleted, it's that the process whereby a marketers needs to book, traffic and manage an online video campaign doesn't necessarily merit that incremental insertion order with the smaller player.

The same applies to distributors, too.  It's widely stated that a major marketer can book millions on television and reach the masses with a phone call or two.  But to replicate that online, you need to do much more.  Indeed, for example, despite cracking the top 10 list itself, aggregator 5Min sold to AOL to get more reach and a faster access to the largest advertisers.  YouTube laggards DailyMotion and Metacafe find themselves in the same predicament, as do most if not all ad networks.

Ah, right.  Enter the ad networks

Regardless of whether the properties above produce content (TMCs, portals) or not (aggregators and Facebook), they are generating the lion's share of their video inventory via user-initiated, click-to-play (CTP), in-stream inventory.

Meanwhile, while the display ad networks have always aggregated audiences and offered considerable reach and targeting opportunities to advertisers, they have done so via in-banner inventory, which makes sense given their origins as display banner ad networks.  But as banner ads get pressured from search (for performance campaigns) and video (for branding campaigns), then the ad networks are scrambling to dip their toes in video advertising by running in-banner video campaigns.  The fact remains, however, that over time, many of the ad networks need to conceptualize, develop and execute strategies to build click-to-play in-stream views generated by engaged audiences, instead of relying on auto-play in-banner impressions by a passive one.  This is why some of the video ad networks have become attractive to the display ones, because some of these have created in-stream inventory too.  For more on the entire CTP vs. AP dilemma, read this or this.

That transition won't be easy, for many of the ad networks have no experience in content and even less desire to get into the content business, having always reached audiences through the back door by targeting by demographics.  But, as video has proven, this isn't search, let alone display.  For the networks to stand a chance to survive, they will have to toss out their playbook and start with a clean slate.

8 comments about "The Oncoming Flight To Quality In Content And Distribution".
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  1. Ashkan Karbasfrooshan from, May 16, 2011 at 2:53 p.m.

    Holy typo!

    "all three portals produce a modicum of talent"

    should obviously read:

    "all three portals produce a modicum of content".

    Yikes. Sorry about that.

  2. Grant Crowell from, May 16, 2011 at 3:31 p.m.

    Thanks for this article, although I would say this shows the limits of doing video on ad networks, which have to segregate search/performance from branding. Social video advertising takes advantage of both search and branding, and is a better gauge of "earned media" because it's content that's worth sharing. Ad networks certainly have their place with video, but you can see the limitations.

  3. Ashkan Karbasfrooshan from, May 16, 2011 at 3:44 p.m.

    Grant, certainly agree about their limitations. Few if any have real, organic views to leverage the way publishers, portals and aggregators do.

  4. Paula Lynn from Who Else Unlimited, May 16, 2011 at 5:46 p.m.

    Holy profits, too ! What makes the cash register ring ?

  5. Jeff Bach from Quietwater Media, May 17, 2011 at 10:57 a.m.

    As a premium content creator on the small side of the fence, I've made my peace with most likely never attracting interest from the big mass media entertainment crowd. My niche topics do not fit the generic, widely-scoped type of content that advertisers seem to want and old media continues to create.

    Am I the only one that sees the day coming when the largish generic audiences (seemingly preferred by big brand marketers) have broken up into smaller passion-based groups adhering to JUST the topic that interests them? If that day EVER comes, and it may not I admit, then an ad-based revenue model simply will no longer work as the number of eyeballs coming to one place will not be enough to satisfy. pay per view and subscriptions start to become significant IF (and this is uncertain) audiences continue to splinter into smaller and smaller groups based on specific topics.

    Smaller audiences picking their subject seem much better suited to SMALLer studios creating these specialty topics rather than big studios generating big costs to produce big shows that may no longer fit the viewing demographics.

  6. Ashkan Karbasfrooshan from, May 17, 2011 at 3:59 p.m.

    Jeff, great question.

    You are touching on my next article.

    Sneak peek: sadly, while in theory the Web is a great opportunity for niche content providers, the early verdict indicates theory is very different than reality.

    Tune back in 2 weeks and we'll explore this issue in greater depth.

  7. Jeff Bach from Quietwater Media, May 17, 2011 at 6:16 p.m.

    AK, as the owner of a portal, I would expect an answer like that from you :) It's the one I would give too if I were in your shoes. After all, if ad-based revenues quit working, your business goes up in flames just like msn and yahoo etc. Maybe sooner since you are smaller than they are....

    I think the best answer is the one that contains the overused phrase "it depends". To me, ppv, ppd, and subscription are much more of a retail experience with buyer psychology in mind, whereas the generic content surfing behavior that characterizes snack viewing today does not exhibit a whole lot of buying psychology (in my opinion anyway).

    This puts an onus on the creator being much more of a business person than is typically seen today amongst the indie film crowd. This works in your favor and against the crowd I'm in. All sorts of social media and relentless selling, promotion and marketing becomes paramount and that is something that most indies can't or won't do. So the little specialty niches will likely tend to stay small due to lack of sales ability more than anything else.

  8. Ashkan Karbasfrooshan from, May 18, 2011 at 1:49 p.m.

    hey Jeff,

    I might as well trademark "it depends".

    To be fair, I am not sure is a portal, maybe a destination... to some extent, but let's face it, we're a producer who rely on distribution (be it licensing or syndication) to build an audience and generate revenue.

    In any case, I will expand on what I meant in my next article.

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