Commentary

Upfront 2013: Boom Or Bust Scenario For Digital Video Publishers?

The 2013 upfront will be the first year when a common currency — Nielsen Online Campaign Ratings — are available for both television and online video.  We’ve already heard major media companies embracing a unified selling approach.  For instance, ABC announced that it will use Nielsen OCR to measure viewing across both television and online sites and will offer audience guarantees based on total viewing across all devices.

Much has been written about the benefits this would offer advertisers, but scant attention has been paid to just what this would mean for media companies and their online publishing arms.

At first glance, this seems like a logical win-win scenario for both.  Advertisers will now get to realize holistic audience-based campaign targeting across platforms, and publishers will now have a legitimate chance to finally grab long-awaited, highly coveted shares of upfront television budgets.  

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On second glance, however, there is a troubling challenge lurking beneath the hopeful enthusiasm.  According to our parent company Videology, Inc., 80% of digital video RFPs now include a Nielsen Online Campaign Ratings element — and it’s likely to grow even higher during the upfront.  While television networks are equipped to manage inventory based on decades of Nielsen-based modeling, most publishers have virtually no tools available that would allow them to adequately forecast against the new ratings verification system.

The Problem:

When publishers sell their inventory with audience guarantees, they don’t get paid for those impressions delivered out-of-demo.  To determine demos, publishers use first-party or third-party data providers to identify their audiences and deliver targeted impressions to advertisers.  Yet for campaigns utilizing digital ratings such as Nielsen’s for demo verification, a publisher’s performance is then measured by age/gender criteria from a different source.  This could potentially lead to differing classifications of a single impression between the publisher’s data and the ratings provider’s data, with impressions previously considered a part of the advertiser’s target now being declared out-of-target. This discrepancy would of course diminish publisher revenue top lines, and make forecasting and inventory management extremely difficult.

This uncharted territory could lead to tremendous inventory deficits – or, if played too conservatively, inventory surpluses that could mean millions in lost revenue opportunities during this year’s upfront alone. In fact, our initial testing showed that OCR verified campaigns could require almost double the number of served impressions to meet a given demo guarantee.

The upcoming television Upfront season offers the best opportunity that we have seen so far for digital video to take a major leap in garnering significant media spend allocations. But to sustain these gains, we will need to ensure that all parties within the ecosystem can thrive within the “video is video” world—including the publishers. 

A predictive technology that bridges the gap between what publishers think they are delivering, and what providers like Nielsen say they are delivering, is an urgent albeit unconsidered need within our industry.

3 comments about "Upfront 2013: Boom Or Bust Scenario For Digital Video Publishers?".
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  1. Nick Dimitrakiou from Convidence, April 12, 2013 at 1:20 p.m.

    Does anyone else still feel there is a void here? Same thinking/approach in trying to "value" online video.

    Fresh thinking is always welcome. Anyone interested in hearing more about valuing video based on engagement?

  2. Rick Monihan from None, April 12, 2013 at 7:17 p.m.

    I fail to see 'the problem'. Is it waste? If so, TV has 'wasted' impressions for years and yet continues to account for the lion's share of revenues for a distinct and meaningful reason - acceptance of third party accountability.

    I don't believe targeting is necessarily meaningful. The likelihood of the targeted ad hitting its intended target is statisically no more precise than the likelihood that OCR or vCE has identified the audience.

    From my POV, the issue is one of abundance and scarcity. OCR creates a form of scarcity, and given the rate of growth in video this is going to be a meaningful thing to have.

    The 'wasted' impressions can be more than made up for by raising CPMs to account for the differential/'waste', until the data is more fully collected and analyzed, then move forward from there.

    Will there be losers? Absolutely. But there always are when changes come about. We can't find solutions that will make all players happy all the time.

    But the ability to adapt to the changes as they present themselves, and overcome those challenges are what make great organizations great.

  3. Michael Natale from MCM Media Sales, April 15, 2013 at 2:23 p.m.

    "The 'wasted' impressions can be more than made up for by raising CPMs to account for the differential/'waste"

    That's the TV mantra.....Raise cpm's and deliver a smaller audience for you advertisers year after year. You just described why it's a broken system Rick. Your clients don't win when you charge more for less year after year.

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