Are online video ads too expensive?
Cory Bergman August 21st, 2006
That’s what one interactive marketer is suggesting. “The CPM is almost the elephant in the room that no one talks about,” writes Jay Krihak, partner of MEC Interaction, about the rising price of broadband video ads. “Is the premium price that affords one the ‘privilege’ of running ads before online video content really worth the added cost, or simply cost-prohibitive?” He has a point. As consumption continues to skyrocket, the law of supply vs. demand will come into play and begin to put downward pressure on CPMs. The sites with the best experiences, most unique content and strongest brands will have the most negotiating leverage. The commodity video sites will have the least. (Free reg. req.)
26 Comments Add your own
1. Safran | August 21st, 2006 at 3:38 pm
The market bears what it will bear. Mr. Krihak may not value the ads and may think the current market conditions set prices that don’t see a return for his clients - that’s fine, we’re all learning our way. But I have yet to run into a stalemate with a client because our ads are too expensive.
A $30 CPM gets you *run of site* on a local station streaming 250,000 videos per month for all of $7,500. Every video. All yours. $7,500. Does anyone find that “cost prohibitive?”
2. Eric | August 21st, 2006 at 8:54 pm
Too high? For a captive audience with a targetable demo (assuming you’ve got your story categorization code working) I think the prices aren’t high enough.
You don’t even need performance measures. If the preroll ran, chances are 99 percent that the user watched it. No one gets up from their chair to run to the bathroom during a 15 second pre-roll.
3. Dan | August 21st, 2006 at 9:42 pm
This is why I love, and work in DRTV.
We know the next morning whether it worked or not
and what stations (broadcast and network) to
keep buying or not. When we advise our broadcast
clients to use the web, it’s only if they have an
offer right from the site. Otherwise it’s Ford and
Nike all over again, a total crap shoot.
Our infomercial clients
actually get their advertising for free because
the sale of the product pays for the ad
or we don’t buy that station anymore.
It supports retail like crazy.
I had thought this was the good thing about the web too, but from reading this article it seems like all
people are doing is trying to make the web
radio and TV as they knew it.
I think this is such a waste.
Dan
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