Greg Smith, COO of Neo@Ogilvy, (www.ogilvy.com/neo) one of the major players in the broadband video space, is this year’s first iChat personality. Smith offers fascinating comments on how broadband video is transforming American advertising, not just by allowing advertisers to play videos online, but revolutionizing the way advertising reaches an audience.
The transformation is as dramatic as the introduction of broadcast advertising was over 80 years ago, and signals a new mode for delivering content that will revolutionize the delivery and consumption of commercial messages.
iSPOT: Can you tell us how many of your clients use broadband video advertising?
Smith: A couple of dozen, at least 24.
iSPOT: What kind of clients tend to use it?
Smith: It’s hard to generalize. We do b2b and consumer stuff and I don’t think there is a general thing; so much depends on what the strategy is and how broadband is fitting into what they’re doing.
iSPOT: Could you cite some success stories?
Smith: I wish I could. We’re trying to find quotable cases, some clients are amazingly secretive. One of the initiatives we have for 2007 is to get some of these clients to talk about their cases, so I can’t give you specifics now. But there’s a couple of different ways broadband ends up being part of the plan. Sometimes it is an adjunct to TV, straight from the TV budget dollars because of what it can add by reaching audiences that are underdelivered. If I want to reach CIOs or men 18 to 24 and they are difficult if not impossible to reach through broadcast and cable, broadband certainly helps. And if I have a strong video message, this allows me to supplement TV and reach them. Another way is part of whatever the creative idea is, it requires video as part of the sell. For example, I have one client whose brand proposition can be strongly conveyed through a visual demo so they love the idea of the broadband video catching someone’s attention with that demo and having a companion unit to close the deal.
iSPOT: What would you say inhibits advertisers from using broadband video and what can you do on the agency side to motivate them to do it?
Smith: One thing that inhibits people is they think TV is something that comes through a TV set. They don’t understand that video is something that comes from many sources and is delivered through many different channels. They don’t understand they have the flexibility at a time when broadcast and cable are increasingly underdelivering at increasingly higher CPMs. They now have alternatives to deliver what is probably the richest media format. There’s no denying video has sight, sound and motion. A second obstacle is a lot of money is tied up with TV budgets and TV buyers are historically misinformed about this medium. Some people are treating it like another day part, which is selling it short. My argument is that broadband video is just at its beginning and a little crude, but buyers should think of it as a step into the future of TV. At a conference in December, a guy from Starcom said he didn’t think broadband had much future. I thought he was nuts. His reasons were very short term and immediate, like they haven’t gotten the CPMs they wanted, but this is the marketplace.
iSPOT: How can you as an agency convince clients to get over their inhibitions?
Smith: The bottom line is a lot of times we don’t. I can’t convince you to do it if you’re not ready to do it. I can show you things. I can tell you I can take you to CNN or ESPN and say let’s experience it or go a step further at NBC.com or ABC.com and watch an episode online and say call me the next day and you’ll tell me the commercials you saw and I guarantee you’ll be able to recall those commercials because that’s the way TV was designed. If your commercial was the only one in the pod, people watched it the way it was written to be watched. I can show you all the statistics and how it’s growing. We can walk out of the office and stop 10 people and find nine of them watch short and long form video online. So you know all that. But it must be experienced. It’s the Internet itself. It’s like rich media, like search, each one is a battle. Not just with marketers, sometimes with your fellow channel planners. You have to experience it and if you’re not ready for it, fine, I’ve got other clients who are.
iSPOT: What about the publishers’ side of the story. How are you working with them to improve the use of broadband video advertising and getting more inventory?
Smith: Actually, inventory isn’t usually a problem lately. Certain publishers did great studies on broadband and we encourage them to do research and teach us what works. I’ve known shorter is better online. Anything they can do to encourage that and discourage people from repurposing a :30 is a good thing. Education is a great thing for publishers to do. It’s also interesting and heartening to see TV companies starting to understand that video content doesn’t have to reside in a certain place. You can work with an on-demand model and if you look at a property like Fox’s 24 where they experiment with mobisodes or you look at what ABC and NBC have done with putting their best shows online on demand, they have to develop new models for it and make sure it’s sustainable because these shows cost a lot. I am very encouraged with the way the TV industry is freeing itself from the tyranny of the schedule and I hope people will begin to understand how with online viewership, commercials can get played without being fast forwarded through and I hope that would be added to audience numbers. I’m very encouraged with the way networks understand and embrace the medium. They’re not in the scheduling business, they’re in the content creation business.
iSPOT: Do agencies need to come up with new formats so advertisers don’t simply repurpose their TV spots?
Smith: Scale will help with that. As it gets more important, it will justify production budgets to slice and dice it in a proper way. That’s what drives it; there’s a reason we don’t do certain things as much because critical mass isn’t there and it’s not cost efficient. An edit is one thing but creating customized content isn’t always justified. But we have the staff to do it and the cooperation between the online and offline people to do it.
iSPOT: What will be happening with YouTube and Google–not much broadband video advertising has appeared there yet?
Smith: Google is just learning how to play in that field. At the end of the day, YouTube is just snacks. Entrees are long form programming. Long form on demand, I see it when I want to see it, where I want to see it is taking off. It’s TV experienced on a lap top computer or in my living room or on my cell phone. Scale may change completely and I think the economics are still hazy. Will I have a program that delivers a 20 household rating? I don’t know if I’ll be able to build water cooler hits; it may take several channels to do that. I do know that consumers are voting through their behavior, they’re watching less TV because they don’t have time to watch it the way the networks have set up, so they need that flexibility. If you look at broadband content, it’s like water that flows in different ways, in streams and rivers to the ocean and underground. It’s important to remember that the Internet flows through cell phones, PDA content and gaming. It has flexibility and less rules than the old broadcast model that was linear, with scheduled air waves and frequency. This is unlimited frequencies, with no scheduling. Once you start looking at things that way and get out of the structures of media, you start realizing the unlimited potential.
iSPOT: How can advertisers take advantage of this potential?
Smith: It’s hard for advertisers to take advantage of it because it doesn’t favor the old way of aggregating an audience quickly and inexpensively. It will become harder and the model has to change from a reach frequency model to a targeted reach engagement model. It will ultimately move into a post advertising model. The post advertising model to me is the whole thing of what would you do if you didn’t do ads. A lot of content may come from marketers themselves. It may not be pre-roll. Who’s to say you cannot create content? Now I have an unlimited distribution channel. I don’t have to buy time. I can do it on my own and create content on demand. A lot of roles are changing. The Internet is changing the rules of the distribution method. It’s not technology, it’s not new media. It’s this thing that changed the rules, like the airwaves changed the rules of entertainment and advertising about 80 years ago. You look at the first commercial broadcast and say that changed the rules and created the era of mass media which hadn’t existed until then. It could be that mass media could be the aberration. It’s only existed since 1921 where you had significant numbers of people attending the same medium at the same time. Before that the biggest audience they could aggregate might have been through Harper’s magazine and it was only a small audience and never simultaneous. Who’s to say this whole thing of consuming media en masse on a schedule is the normal thing. To me it could be an aberration people don’t want but it was the only way they could get that content. Broadband is providing a new form of usage. The world is changing.
