This Upfront, Will Digital Video Be Bought Like TV?

  • by May 9, 2013

Let me start off by saying that as the head of sales for a digital video publisher, I may not be the most objective source in the world, but I believe this is the year video will begin to close the gap with television in the upfront marketplace. Hear me out.

Last week, participants at the Digital Content NewFronts showcased hundreds of hours of original digital video content, professionally produced and ready to be distributed across multiple platforms including mobile, tablet and OTT.  Heavy hitters across traditional TV and digital media made it clear they take digital video seriously; as a vehicle for high-profile producers, directors and talent to create content and a platform to build brands with valuable metrics.  

The Associated Press predicted that deals at the NewFronts could reach $1 billion, a sizable shift from last year.  



Clients have acquiesced to ubiquitously shift dollars to buy “video” whether it’s linear or digital and in turn, TV networks have responded by making impressions measurable regardless of the platform.  The big challenge is to get the digital agencies to think of, and buy, digital video in the same way they do traditional TV.  Some have started to implement buys with a comScore vCE or Nielsen OCR metric, but it’s just the beginning as the original forms of measurement are gradually replaced and client demand for digital video increases.

In traditional TV, a network will send a media plan of programming to the buyer.  It has a household CPM, an audience composition metric (VPVH) from Nielsen which equates to a demographic CPM; a mathematical result of the first two metrics. Based on these metrics, a higher CPM is paid when buying against a specific demographic.  Depending on the demographic, it could be 5x the household CPM or more.  

In digital video, the vCE and OCR metrics are now the equivalent of TV’s VPVH index.  Not having a comparable demographic index to traditional TV in the past has arguably been the main reason we haven’t seen TV dollars migrate over to digital in the same capacity.  Clients want the apples to apples comparison with metrics they are familiar with. Now, we might actually have it with these new applications.

But herein lies the billion dollar question: Will buyers come to understand the value of digital video enough to pay the increased CPM the way traditional TV buyers do?  Take for example" Cybergeddon 2" that’s coming out from Dolphin Digital Entertainment.

"Cybergeddon" ran on Yahoo Screen last year and was one of the most expensive Web series of all time.  If a client wants to buy it this year, and they want it guaranteed against men 18-34, they should pay the same CPM against that demo as if it were a series or movie running on the SyFy cable network. A TV buyer wouldn’t blink at the CPM, and would value it fairly. But will a digital buyer?

We are already seeing a shift as most agencies realign their buying groups to be specialists in all things video – regardless of the platform.  In my opinion, those agencies have a head start and will sooner come to fully understand how and why digital buys are so vital to an overall media plan and strategy.

Only time will tell how it will shake out, but digital video creators will have to dig in and make sure they get full value for the professionally produced, high quality original content that brands and agencies have been asking for. After all, if the agencies want “TV like programming” with a guaranteed CPM against a specific demographic, they should pay fair value for it.

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