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The Three Benefits of Digital Video and TV

Everyone wants to figure out what effect the digital landscape is going to have on the mammoth $70B television advertising spend that occurs yearly. Already, we've seen display advertising video ad nets, like Videology, TubeMogul and Adap.TV begin to buy remnant inventory through the Real-Time Bidding (RTB) process, out of exchanges and Demand Side Platforms (DSPs). While each of their business models is different, this is a drop in the bucket compared to the total television/video inventory that is available. 

First, we need to attempt to define what we're talking about. I look at it like this. Video is original content, made specifically for the online and mobile environments. TV consists of content that was developed for distribution through traditional network, cable or premium stations but because of today's media choice, it is made available everywhere. Online display advertising can be bought against these two types of streaming capabilities and channels. Also, set-top-box data can make the traditional TV ad buy more closely resemble the online ad buy. I'm not even going to mention connected televisions yet, but they will have scale one day and we'll discuss.

This is all a big deal, because in current traditional television ad buying, there is a ton of waste. True, advertisers have the opportunity to reach 96% of the population. But, the buy is very uninformed due to the panel method of measuring and the inability to profile the audience. This leaves the advertiser unclear about true reach, while also unclear about the lifestyle and demographics of each advertisee (if that's a word). Adding set-top-box data to the equation allows the media buyer more insight into their target audience size and composition. 

So, what does this all mean? It means there are opportunities and huge benefits to the advertising and online ad industries.

1.   Scale

Gizmodo estimates that 2.65 million customers have left cable since 2008. This means that more people are seeing the value of viewing content solely through online channels, like Netflix, Hulu Plus, Content Websites, etc. Full disclosure: this will likely be me in the next 60 days. I think it's a benefit because it adds impressions and scale to the often hard to fill video ad buy. More opt-in users offer more insight to advertisers, strengthening the data models, and ultimately ad performance, which will eventually equal more dollars spent in online video advertising.

2.  Transparency

Advertisers feel as though they have a right to know where their creative is running, when, to whom and how often. Rightfully so. They spend huge dollars all over the media landscape. There are issues with transparency in almost every channel. However, as larger brand dollars flow to the online advertising ecosystem, there will be more attention paid to transparency online, where it is completely feasible to get a report of where your ads ran. Also, to what kind of targets your ad was placed in front of.

Today, there is still a lot of contextual and blinded third party data buying. Plus, there are networks out there that still don't want to give up their secret publisher network media buying sauce. Contextual can be mixed in to the overall buy, but it should not be the determining factor for your ad buy. Can you imagine running your midroll ad during Saturday Night Live digital playbacks? Everyone watches SNL; you would prefer to buy against the audience, knowing they were watching SNL, so you could place your humorous spots in front of the right targets, I would think.

3.  Recall

Recall can be one of the strongest predictors of conversion. In a stupefying study, Nielsen promoted this idea by completing a 14,000 person survey that proved just that. While they qualify this by noting that they're discussing premium online video content, this is still stupefying. I digress. (Premium) video beats television ads in all four categories of General Recall, Brand Recall, Message Recall, and Likability in the study.

Nielsen Premium Video Study

I have no hard evidence, just theories, as to why this is so: digital video ads don't last very long; clicking (ergo engagement) is necessary when watching digital video; digital video ads are interactive and often, all of these features further the message seen in other channels with the added "lean forward" aspect that occurs when engaging with media. 

What do you think about the future of connected video, either through set-top-box, connected television or on mobile/online channels?

Posted by Therran Oliphant, Product Marketing Manager, Polk (04.11.2012)

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