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MediaPost: Online Video Advertising: Taking A lesson From Sponsored Search

MediaPost, Online Video Insider, Posted October 2nd, 2007 by Michael Shehan
Sponsored search is arguably the most revolutionary and successful ad medium. And it just might represent how future media budgets are managed across other segments such as television, radio, and of course, online video advertising. Granted, sponsored search is mostly about direct response, not branding; however, it is hard to argue against the merits of real-time optimization methods that maximize reach and limit waste. So, what practices utilized by successful search and interactive advertisers can be applied to other forms of advertising, such as managing online video ad campaigns?
First, consider the media planning process itself; it differs greatly between online and traditional buys. Interactive marketers benefit from the rapid (near-immediate) data feedback of their campaigns. Buy some keyword clicks, track the results, and optimize. For many interactive marketers, a campaign can be created, tested, and evaluated in as little as a week or two. As such, buyers of sponsored search don't think in terms of the upfront buy or quarterly budgets. Instead, they look at goals like ROAS and net contribution, and then adjust spending on the fly.
Regrettably and understandably, traditional agencies have been applying broadcast media buying practices to their online video ad buys. However, an online video ad buy occurs one impression at a time, just like with search and not by millions of viewers at a time. As such, these media buyers should use the same strategy as their interactive counterparts when planning an online video advertising buy. A media plan for an online video ad buy actually doesn't need to look much different than a traditional plan; it should answer some of the following questions:
· What is the target audience?
· What traffic sources (ad networks, individual sites, etc.) attract the desired audience?
· What is the desired CTR?
· What minimum average of the commercial needs to be viewed (25 percent, 50 percent, 75 percent)?
· What are the target geographic region(s)?
· What is the target CPM?
· Over what period of time should the goal impressions be achieved?
· If direct response is important, what kinds of conversion rates are desired?
Once the model is built, a small campaign can be launched on some or all of the sources. Many sites will require larger buys. In that case, first test it on the sources that will allow smaller buys, including video ad networks and exchanges.
Once interactive agencies have collected sample data (which can take between a day and a week), they typically analyze and measure it against the campaign goals. They analyze their targets including keyword spend, conversion rates, etc. Then they leverage the data to optimize and expand the campaign. Utilizing real-time performance data and constantly optimizing the campaign is an ongoing process for interactive marketers, and it should become standard practice for media buyers at traditional agencies as well.
Surely that brought a collective groan from media buyers everywhere, as they are already resource constrained. As the industry and the audience continues to fragment, it takes significantly more time and resources for traditional agencies to reach their target audience, as compared to 20 years ago when the audience was found on only a few networks. Naturally, the last thing needed is extra work.
But consider: interactive agencies spend about 10% of their time buying media, and about 90% managing and optimizing campaigns based on real-time performance data. Conversely, traditional agencies spend about 90% of their time planning and buying media. Of course, interactive marketers have the tools to manage campaigns in such a manner, but traditional agencies do not. However, those types of tools are beginning to emerge for online video advertising, especially from video ad networks and exchanges. By using them, traditional media buyers can shift their time from media buying to media optimizing.
Traditional agencies are re-inventing themselves. That was a common theme at the OMMA and IAB shows during Ad Week in New York. At a time when traditional agencies want to "go digital,"and when their clients are requiring more accountability, adopting some of the above suggestions is a great and easy place to start.
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By On October 2, 2007
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