• by July 13, 2011

I've been reading a lot about how the digital video marketplace is (or is not) a component of the TV upfront. The truth is, while the digital video marketplace shouldn't be part of the TV upfront, there is absolutely a need and a role for digital video publishers and networks.

In the TV market, the limited nature of the live event and low availability of highly rated programs make the upfront a must for brands. There is obviously a finite number of 30-second spots throughout the year, and brands want to be there. But in order to appear in those highly rated programs, buyers also need to buy programming that isn't so highly rated. They do this for two reasons: First, bundling packages to include lower-rated and lower-demand shows helps increase sellout rate. (Want to be on "Monday Night Football"? Great, you'll have to take four units on ESPN "8 the Ocho" as well.) Second, purchasing lower-rated programming helps buyers make their planning costs and offset the incredibly high gross rating point (GRP) costs for highly rated television. This is also the reason cable networks -- including third-tier, low-rated networks -- have become mainstays on brand plans. With TV CPMs higher than ever, major brands are buying ads on unrated networks for their efficiencies

So why should it be any different in the digital video world? CPMs for both full TV episodes and repurposed TV programming that are shown online are priced at a high cost,according to market demand. Buyers in the digital world need to make their planning costs, just as those in the TV world do. While many publishers are working on professionally produced, celebrity-driven, and high-quality content, video networks offer pricing efficiencies and access to an increased amount of long-tail video content. In most cases, all that content comes inside a standard plan.

There's incredible value for brands in the video ad network landscape. Beyond the efficiencies and the reach that they provide, ad networks can offer custom original and branded entertainment programming, editorial integration, rich media, and interactive ad units. The secret sauce is be able to set your media buy so it's adjacent to high-quality, in-demand programming -- providing reach and pricing efficiency in one package, just like in TV.