Video Essentials

How Online Video Can Attract TV Advertising Dollars


While it seems inevitable that a large chunk of the advertising budgets now spent on TV commercials will eventually find its way to online video, we’re not there yet. It turns out that online video content owners simply aren’t speaking the same language as TV ad buyers.

To help content owners learn what they need to know, we went to an expert. Neeraj Kochhar is the president of Varick Media Management, which operates like an agency trading desk.

An agency trading desk, says Kochhar, is the type of advertising company that’s currently replacing ad networks. They focus on programmatic buying, as opposed to guaranteed buying. If that’s already too much jargon for you, we’ll break it down: the old way of working was to buy a block of ads on a show, picking a show that would deliver the advertiser’s target audience. The new way of working is to be more selective, evaluating each individual request to see if that viewer is in the target group.

That means that in the milliseconds after a video is clicked and before an ad is shown, Varrick and companies like it must evaluate the viewer, bid on the impression (if they want it), and serve the correct pre-roll advertisement. That’s a lot to happen in such a short time.

It’s the next generation of media buying, says Kochhar, built for an addressable, all-digital world. Right now, his company works with exchanges like Adap.tv, which offer detailed information on the audiences for the shows they represent. The business is slowly moving to private exchanges, he says, as online publishers are making available the kind of data that advertisers need.

The clients that Varick represents are ultra-concerned with reaching the right people. To appeal to them, the first lesson is to deliver detailed metrics.

Advertisers will need to see detailed numbers on your site’s audience, and they’ll need to get those numbers from a trusted third-party. Content owners should work with a data measurement platform (DMP) to create a profile of their viewers. Television has an efficient way to measure audience, says Kochhar, but online publishers are still inefficient at it.

The next lesson is to speak the language of TV buyers. Online publishers have so far spoken of their audience in terms of scale and fragmentation. But TV buyers are more interested in reach and frequency. For each advertising campaign, they have a specific number of people they need to reach and a number of times they need to reach them to reinforce their message. Rather than looking to drive a certain action, TV buyers are more likely trying to improve brand recall or to tie a positive association with their brand.

The third lesson is to understand that context still matters. While it might seem like any ad impression is equally good if the advertiser is reaching the target demographic, advertisers still consider the page that an ad is going on. They want their ads on premium sites with premium content. An impression on ESPN.com, for example, is more valuable than an impression on a sports blog. Keep that in mind when planning the look of your site.

All that work should pay off. While TV advertising currently costs more than online ads, Kochhar suggests that could change. Since advertisers are better able to target ads online, and since online viewing is a more active, lean-forward activity, video advertisers could come to prefer it, in time, and pay more for online impressions.

Some advertising money will flow online, Kochhar notes. It won’t happen overnight, but it’s coming and it seems inevitable. Start working now to make your site attractive to advertisers.




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