Buying TV advertising is no longer the exclusive responsibility of linear TV buyers. With the introduction of broadband TV, including full-streamed episodes at network broadband sites, media buyers are buying broadband spots for advertisers looking to take advantage of the new opportunity.
Tracey Scheppach, Starcom’s VP/Video Innovation Director, who buys broadband video advertising for clients, discusses the broadband video TV market with iChat, from the availability of inventory to the metrics and justification for the high CPM prices.
iSPOT: How is the market developing for broadband TV advertising?
Scheppach: One of the things I’m interested in seeing is whether full streaming episodes take root this year. I’m really impressed with what ABC is bringing to the marketplace and we have been involved from the very beginning with several advertisers in three rounds of the marketplace. We’ve seen superior unaided recall that begins to justify the pricing they came to us with. I think their player looks great. I think the environment the brands are in is completely uncluttered which is where you’re getting superior unaided recall. I like the way they put up multiple episodes, which serves the consumer need. Consumers are trying to catch up or they might have seen the very first episode. But other broadcasters aren’t putting up their library; they’re only putting up this week’s episodes.
iSPOT: Are broadcasters offering original content in the broadband space that’s not found on linear TV?
Scheppach: To my knowledge, no, and I think that trend will start to slow. The idea of platform originals, like mobisodes or webisodes, will slow. Eventually it’s going to be one video universe, it’s not going to be a platform. They’re having trouble controlling the video. What the consumer wants is what they see on television. The idea of webisodes, that’s what YouTube offers. For The Office to come up with an ark to the story line, it’s like an annoyance to the consumer, like now I have to sign up with Verizon to see my Office ark. It doesn’t serve consumer needs; they want convenience on their own terms, they don’t want something special on a platform.
iSPOT: If they’re going to see the same thing they see on TV, why do they need broadband?
Scheppach: It’s a convenience factor. I’m pleasantly surprised that full streaming episodes have done better than I thought. For the most part, the user experience is very good and I think they’re seeing little cannibalization. The computer and the cell phone and iPod are seen as not the typical primary video viewing destination, but they fulfill a consumer need for convenience. If I miss it, I’m going to watch it that way. I’m interested in how Fox is going to use MySpace to promote their full streaming episodes. People are asking, “Why isn’t there more?” but we’re in a period where we don’t know how to negotiate the talent rights. The business hasn’t yet figured out how to negotiate to compensate talent for distribution in these new media contact points in relation to their compensation for first-run television airings, but we’re on our way to solutions. Once we break through that wall, the cross platform opportunities for programmers and their advertisers will boom. Eventually more full streaming will be available with back libraries and you can watch it on whatever element you want.
iSPOT: Can you tell me how you’re buying advertising for these programs and how it differs from linear TV?
Scheppach: It doesn’t differ a whole lot. I work hand in hand with my counterpart who does broadcast buying. We’re sold to collectively and we can easily make decisions on who’s the best fit in terms of pricing. We require networks to guarantee their impressions to meet our standards and a few advertisers are holding back for that reason.
iSPOT: What kind of clients are most aggressively buying broadband video?
Scheppach: We’re past the point where it’s even worth noting who’s most aggressive, because everybody’s in there. That’s a little bit of a stretch, but at least half of my 38 advertisers have experience in broadband.
iSPOT: What kind of metrics do they receive?
Scheppach: The industry has done a good job of providing standard metrics. The issue is probably an effort to compare broadband to TV, because we still see premium CPMs attached to broadband. Once you try to ramp up beyond the point we are now and more TV people get involved, they want to see more comparisons to TV, which are difficult. With reach and frequency, it’s hard to compare TV with the Net and it’s hard to justify the increased CPMs on broadband versus TV once you get a TV buyer in the room. Work needs to be done. We have standards we’d love to see the industry support in terms of third party tracking and guarantees, but the industry is doing a fair job of that.
iSPOT: Do you have a sense of how big the audience is for broadband viewing?
Scheppach: We absolutely know how big the audience is; through reporting, we know how many impressions were delivered.
iSPOT: Does that justify the pricing?
Scheppach: Pricing is based on delivery. If you don’t guarantee your delivery, we don’t buy. We require broadband to be guaranteed. When they say they’re going to deliver a million views, we pay for a million views.
iSPOT: Can you talk about what kind of ads your clients are running? Are they all repurposed TV ads?
Scheppach: I see a few interesting new ad models on line, such as VideoEgg. I think it’s an interesting idea. We pay for exposure on the banner and if the viewer decides to click on the banner, it exposes them to the ad; we pay for exposure and then the video resumes once the ad is over. It’s a much less intrusive way and we pay for value. I like that model. But it goes back to the converged world, it’s just video. Ideally on the Internet it might be shorter but that depends on ad to content ratio. It will work itself out.
iSPOT: Do you encourage clients to experiment with new formats?
Scheppach: We encourage them to think about alternative distribution whether it be shorter or longer. We see some advertisers thinking about that in the creative process, especially the bigger ones.
iSPOT: What do you see ahead for this year?
Scheppach: It’s too early to say. In last year’s upfront a lot of programmers came with a very good game. I expect it to be another good upfront this year.
iSPOT: Do you buy broadband video advertising during the upfront?
Scheppach: Yes, we use multiplatform deals which are sold at the upfront.
iSPOT: Do you know what percentage of client ad budgets go to broadband and how this number might change this year?
Scheppach: It’s difficult to determine an average percentage for clients’ broadband spend increases, because it varies so wildly based on client objectives. Broadband is certainly increasing among a number of clients. We’ve seen it increase in a big way in years past, and we see that increase as a continuing trend.
