One of the things that hasn’t sorted itself out in the online video space is the value to an advertiser of the online video view. This depends on many things:
- What audience is watching the video? It’s hard to slice demographics yet since most sites don’t require that information when you register. A lot of marketers are treading lightly because they assume the viewing is done by wacky teens, but I think that’s a dangerous assumption.
- What is the typical “action rate” or “cost per click”? Ultimately did the person do anything after watching the video?
- Most consumer product good (CPG) companies like P&G are trying to brand. So they’ll be more interested in awareness/recall/perceptions of their brand after it’s appeared. I’ve used companies like Dynamic Logic to help determine this. For instance, Mentos probably doesn’t judge its campaigns on how many people bought Mentos online after seeing an ad. Rather they’re looking at “proxy” measures and ultimately whether sales go up in the period during and after a major campaign.
- One of the major drivers will be how many ad units can be sold against video views. If you’re iFilm you’re smashing viewers with pre-rolls, you can make a lot of money but you will probably scare away visitors in the long term. If you’re selling subtle text ads via Adsense you’re being very unobtrusive but probably making dirt.
Typical CPM (cost per thousand) for banner campaigns can range from the low of $5 (via such companies as Advertising.com that buys up random inventory) to $25 and even $50 for very niche upscale sites. It depends on the target audience (teens will be less expensive than physicians, for instance). Performance varies greatly- the cheapest CPM usually is not a very qualified target, so response rates drop.
Since between 800-2500 are reading this blog a day, we can safely guess that some of you have more experience with online advertising than I. What’s your sense of the “value of a view” for ads around popular online video sites?
Recognize that the advertising income sources for an online video view can include:
- Ad frames at beginning or end
- Pre-roll ads
- Wrap-around banners
- Contextual ads
- Special sponsorships
- Eventually the videos might contain sponsored placement- just like Wayne’s World charges Dominos for the pizza box that appears in the flick, maybe Brookers will charge some cash to DietPepsi for having a bottle on her desk.
We can “back into” the current numbers with some rough data from Revver, recognizing that they sell no pre-rolls or banners around videos. It’s all about a single ad frame at the end of the video, and the money is driven on a “cost per click” basis (so the advertiser pays nothing for impressions). So all of those Mentos ads are getting the Mentos brand a nice deal if you look at it from a CPM perspective. It’s like my Google text ads. I pay nothing unless you click. So every ad your brain absorbs and you DON’T click is essentially free..
So Revver is being ultra conservative about advertising, and without having launched officially, it would appear that they’re making about 2 cents per view (1 for the content provider and 1 for themselves). Note- this is an estimate based on my experience, friends’ experiences, and the Eepy Bird success. I think the advertising market will drive that price up, but currently Revver is charging on a CPC (cost per click) basis… not by impressions. Other sites are pursuing content at a “guaranteed .05 cents per impression.” That’s less cash-per-view than Revver but not bad if they get your content more views than Revver can.
Most sites will get more aggressive than Revver by selling slightly more obtrusive ads, but they may not share as much. So maybe the content creator, over time, will eventually make between 1 and 5 cents per view? Sound right?