What makes digital video advertising profitable? Content, context, placement


There’s gold in online video. An estimated 85% of Internet users regularly watch video. Consequently, online video ad spend is experiencing a similar upward arc.

According to a recent Interactive Advertising Bureau (IAB) survey, American advertisers will spend 17% more on digital video in 2014 than they did in 2012, and the migration of ad dollars from televsion to digital video continues unabated.

This year, for the first time ever, digital video spend nearly matched TV spending.

However, to ensure digital video doesn’t become a race to the bottom of the advertising bargain barrel, publishers and video producers must align strategies around the concept of premium; that is, how best to extract the most advertising value from online video.

Consumers crave quality content, and marketers want to associate with the same. That’s no secret. But what is high quality or premium content?

Simply put, “premium” refers to professionally produced content. But there’s a catch: a professional, high-definition (HD) video that features a cat falling off a chair doesn’t qualify as premium. In other words, the actual content is also important.

Of course, Jack’s version of premium video might vary from Jill’s. But, from an advertising perspective, you can bank on the fact that content such as well-produced sports videos will routinely meet the premium standard, especially when talking about gold-standard sporting brands like the National Football League (NFL), Major League Baseball (MLB), the National Association for Stock Car Auto Racing (NASCAR) and the Professional Golfers’ Association of America (PGA).

Furthermore, I consider the “jewel events” that define these various sporting brands — the Super Bowl, World Series, Daytona 500, and the Players Championship — as super premium content.

Premium video also needs premium placement, and to understand this we need to understand viewership.

Measuring viewership in the world of TV is relatively straightforward, determined by the number of households tuned in to a show (which, of course, doesn’t account for the TV being on without an audience, or someone simply recording content for later viewing.)

The same problem exists with the Internet, due primarily to the speed at which this medium moves and connects. That’s why I consider “placement” as the new “premium element” in online video.

If, for example, the video player appears below the fold on a Web page (meaning below your viewing area on your screen) or auto-plays once a user lands on that page, we can’t sell this to advertisers as premium, even if the video shows a 6-year-old kid hitting a hole in-one at a charity golf tournament.

Summed up, premiere placement of premium video equals click-to-play, above the fold, and contextually relevant.

An individual’s time is our most valuable commodity. When consumers devote their time and attention to a piece of video content — and we (as publishers or aggregators) can report and prove it — this translates into premium value.

Most digital marketers get it. However, newspaper.coms and digital publishers still have homework to do.

The content must be paired with contextually relevant articles, be placed above the fold, and be able to prove intention. Just because someone walked into a newsstand store and glanced at X newspaper does not mean the publisher of X can call him or her a reader. At least not with any credibility.

Publishers must focus on video execution if they want to pick up their share of the multi-billion-dollar pie of video advertising revenue available in the marketplace right now.

As for content owners, beware of automated real-time bidding (RTB) systems. Such a model is tempting but, unfortunately, the algorithms behind RTB are the wrong approach for content owners wanting to build the value of their premium content. These algorithms simply can’t place value on, say, NFL, MLB, NASCAR, and PGA Tour video content.

Once the automated market starts to place an associated value on the content itself, then perhaps we will see a more automated approach. For now, it’s up to publishers and content providers to build and maintain the value of premium content.

If they fail to do so, they’ll miss the next digital advertising boat.

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