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Online Video Advertising's Number One Challenge: Measurement
Despite online video advertising's surging growth, its number one current challenge is a consistent and widely-accepted measurement system that allows media buyers, content publishers and brands to gain a clear understanding of how ad campaigns are planned, executed and evaluated. That was the consensus at a launch dinner for the upcoming ELEVATE: Online Video Advertising Summit I attended last night, which included about ten online video industry CEOs, plus brand and agency executives, which was hosted by the private equity firm The Blackstone Group and the law firm Sheppard Mullin.
Today, online video measurement tends to focus on that which is easily measured and at least relatively well-understood: number of views/impressions and the number of click-throughs (if applicable). While that's a good starting point, much more is required. As a number of CEOs noted, media buyers have set a higher standard for pricier online video buys; they need specific information about audience targeting, meaningful engagement, and importantly, the correlation between spending and brand/sales lift. There was agreement that many of these new requirements never entered the equation in traditional TV advertising.
In fact, dinner attendees frequently noted that in TV advertising, there is massive wasteful spending, which is widely acknowledged in the industry. However, this negative is offset by the fact that a commonly accepted standard - the GRP (gross rating point), along with the Nielsen ratings system, allows buyers to understand their spending "impact." While the GRP and Nielsens are ubiquitous, they are far from perfect. In fact, their shortcomings provide a wide opening for online video to capitalize on.
In short, what is needed is the online video industry's equivalent of the "GRP," but one which takes into account attributes particular to online video. On the impressions side, this would certainly need to include "earned" views - those that aren't paid for per se, but are achieved through viral sharing, so that full reach is measured. And on the engagement side, there are a host of attributes that go far beyond the simple click-through. These might include which ad is selected in the first place (when choice is provided), time spent with the brand, lead information provided, extent of sharing, etc.
None of this is easy, but it is essential if the floodgates to online video advertising are to open. While the $2 billion or so estimated to be spent on online video advertising this year - and the 30%-40% growth that's projected for the foreseeable future - is nothing to sneeze at, a much more substantial shift of TV ad spending is going to be required if audiences continue to fragment, and new high-quality online-specific programming is to be successfully funded. Time will tell whether the industry successfully rises to the challenge.Categories: Advertising
Topics: Nielsen
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