This is not fair, nor does it make a lot of sense.
Advertisers pay for ads on videos as they would banner ads, on an impression basis. If you watch a video or surf a web page with an ad banner, it’s pretty much the same. Advertisers pay publishers a certain amount for a thousand views, or the term is cost per thousand, CPM.
This stinks. After all, watching a video is not at all like seeing a banner ad. When you are engaged, you watch the pre-roll or the overlay or the sponsor message.
The industry is starting to create metrics for engagement, but it is not there yet. On Friday, I spoke with Rebecca Paoletti who is director video sales strategy at Yahoo! Rebecca also serves on the Interactive Advertising Bureau (IAB), the industry association which sets standards for online advertising.
Rebecca told me in this interview that cost per impression for video doesn’t make sense. We agree whole-heartedly.
She says that one giant imperative for creating engagement-oriented advertising pricing is that so much of online video is long form. Like television shows, online video also needs ways for advertising to be inserted.
She also said that live programming, particularly with the advent of Microsoft’s Silverlight, will require new advertising models that are different.
Speaking here, as video producer, creating content is expensive and time intensive. Plus, we think it is powerful advertising environment — there has to be a more equitable payment system. Rebecca hopes that standards will be finalized this year. We sure hope so too!
The Engagement Debate
Meanwhile uptown today, Chris Albrecht of NewTeeVee moderated a panel on this very topic of engagement and monetization of online video. The afternoon session of movers and shakers in digital media was organized by VideoEgg. Wish I could have been there, but Chris has good summary up on NewTeeVee.
We will be speaking to those clever eggheads tomorrow in our studio — so stay tuned!
— Andy Plesser
