What You Don’t See Is What You Get

2015 02 24   Peter Feinstein   Media and Regualtion    

I understand Mikael Mathison’s quest to bring some kind of a standard to all video advertising. (We Need New Standards In TV Ad Measurement, AdExchanger, Jan. 29) It’s a noble pursuit!

But there are a number of hurdles to getting media buyers, my company included, to move away from broadcast or cable TV and into online, over-the-top television (OTT), or any of the other several dozen video-delivery vehicles.

There is one fundamental tool for “comparing the results delivered by linear TV and online TV.” It’s called return on investment (ROI). It’s the most basic of all business concepts, and it’s determined by using the most basic and reliable of tracking tools available to most any marketer.

So let’s look at the fundamental challenges that most in the media-buying world are facing with non-linear TV: online fraud and unviewable impressions. Those are deal killers for almost anything other than broadcast or cable, and here’s why: The cost per thousand impressions (CPM) of these potentially high-flying online video delivery channels isn’t priced to account for the fact that half of all chargeable impressions don’t actually happen.

Once the pricing compensates for that, more of us may dip our toes in the water and test the viability of online, OTT or one of the increasingly fragmented ways of delivering a video message.

And that increased fragmentation, which is fodder for an entirely different post, affects the value proposition of ALL other video delivery vehicles besides broadcast and cable television.

Things get even more complicated with the introduction of programmatic buying. (Programmatic to Grow in Connected TV, OTT Video, Response, Feb. 18) My biggest takeaway from Doug McPherson’s story is that more than 35 percent of agencies surveyed either don’t trust or don’t understand programmatic media placement, yet they’re going to shovel more money through that “portal.”

It’s crazy! The groupthink at these agencies must be something like this: “Okay, so we promised our client that we were going to buy x-million impressions at y CPM – even though we don’t get the transparency we think we need. We don’t really know what we’re buying because we’re buying through an automated portal (i.e., “programmatic”), but we’re going to do it anyway. We have faith that the portal we’re using is going to do right by us, even though it doesn’t tell us what we’re buying and where.”

That’s really scary to me. The concerns only mount as I ponder the limited availability of programmatic buying for online and OTT video. There is a veil of secrecy between the seller and buyer – for what looks to me to be the desire for the middlemen to overcharge buyers and underpay sellers.

That’s Just my take. What’s yours?