Is The Big Shift Underway?
by: Eric Franchi, Monday, March 30, 2009,
This week, I was having a conversation with a colleague who has been at the top of the digital agency world for the past decade. This is the kind of person from whom you tend to learn something every time you chat — a real maven. We touched on a variety of topics, including online video. Specifically, I wanted to get his take on why we aren’t seeing a seismic shift of budgets from TV to online. The online user base is highly engaged, and there is more premium content and measurement ability than even one year ago. My question centered around the marketers who are interested, but not at the level of going all-in.
“Simple,” my friend said. “Big brand advertisers want scale. TV delivers it, and cheaper. It’s hard not to justify just buying more TV rather than investing in online.”
That statement points to a supply/demand imbalance that online has been struggling with for the past few years. In mid-2008, Forrester pegged premium online video CPMs at $40-$70 (the latter being for a level of programming like NBC’s “The Office”) while TV averaged $25. Even in 2009, when CPMs are lower across the board, TV still wins because it has the critical mass to deliver pricing efficiency. Right now, the only online video format that has significant scale is user-generated video, which most brand advertisers shun for reasons discussed many times in Video Insider posts such as brand adjacency, length of content, quality of content and user experience.
So we wait for the big shift of more professional content creation and consumption to occur, while TV gets the lion’s share of marketer attention. And we wonder when the shift will begin.
Well, recent findings by AccuStream iMedia Research presented by eMarketer in late February show that the shift may have started last year. AccuStream reported that professionally produced content grew nearly 25% last year, with TV content (think those prized episodes of “The Office”) making up 17% of the viewed streams.
It’s difficult to project out growth rates in anything online due to the emergence of game-changing properties and technologies every couple of years. Irrespective of that, it’s clear that the supply is growing. And if it keeps up, the “TV is just cheaper” argument won’t last for much longer.
Is the measure of a MediaPost blogger’s performance (hey, we’re in the online business, everything is measured, right?) based on the level of conversation he or she can generate with a post?   If so, then this writer is reasonably happy with our most recent effort. My last post, “Is The Big Shift Underway?,” highlighted some interesting statistics in the growth of professionally produced, long-form video.
More On The Big Shift
by Eric Franchi , Monday, April 13, 2009
Professional content remains the “gold standard” as far as attracting marketing dollars, and that combined with scale makes TV hard to beat. But interesting stats show that supply and viewer consumption are rapidly increasing. We hypothesized that this trend will result in a natural decrease in CPMs and will be a major driver in the shift of TV dollars to online video.
I recommend checking out the comments section of the post for an interesting discussion by the Video Insider community on what really needs to change.   Apparently, an increase in supply is only the tip of the iceberg. This writer does not disagree.
Almost universally, the community agrees that an equally important element that should ultimately push online over the edge is its inherent ability to do what TV cannot: audience targeting — be it behavioral, demo, contextual, self-selection, or any of the other ways to identify marketer prospects — against the uniquely engaging format of online video. Add in advanced forms of measurement and analytics to prove ROI beyond transactional metrics. Let scale work itself out, and the dollars will come pouring in.
Or will they?
A couple of commenters brought up an interesting point: in an environment of TV spots being TiVoed out and declining ROI and online catching up, TV may still win out. TV is the safe choice, and one that has worked, albeit with declining ROI, for years.   “No one ever got fired for buying (insert top rated show),” as the saying goes. So what might need to happen? Phil Guest of Sulake said it very well: “Times are a changing, though, as the next generation of marketers and media execs become the decision makers rather than influencers they are today. The shift that sees digital as the starting point for communications planning is well under way, one day we might wake up and realize it is here.”
Is it a generational shift that needs to happen, rather than a shift in supply and technology? What do you think?
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Excellent: Drake Morton