Q: How is the rise of online video consumption influencing marketing?
A: The core question about online video is, will it provide the huge promise of accountability? I think to an extent it does. Television [ad executives] in particular will start paying attention to that in a much more significant way because they are really after the accountability of where that spend is. The key indicator [will be] what kind of metrics online video produces, and what kind of a buying paradigm that produces. If it starts producing behavioral or intent driven advertising buying or the metrics associated with that, then I think that you’ll see a disproportionate amount of spend in online video.
Q: What will this do for the expectations for traditional TV advertising?
A: I think it will raise the bar for the kind of metrics and the type of accountability that is absolutely essential. On the television side, we are still living in a world designed in the 1950s for three channels. So you had a sample of the audience, and between these three channels you could figure out where each sample of the audience happened to be at any given time. Now, with the amount of fragmentation of that audience, that methodology is still being used, but it’s being abused. The big pressure point that it is going to create is how to increase sample sizes or get to a sense of measurement. If that happens, I think you are going to see the next generation of the television medium on the buying and selling side be much more about metrics-driven ad selling as opposed to program rating.
Q: Will a metric-driven ad model alter the need for branding in video ads?
A: If you have a better level of accountability and you can start measuring what the consumer is seeing, then you can have a reasonable business case for how many types of commercials you need to get a brand communicated in an effective fashion. Today it is sort of the old reach and frequency game, in which you can neither measure reach nor frequency in a reliable fashion. The cost of creative production has been declining pretty significantly, so why wouldn’t you see a world where you can have hundreds of channels and video on demand streams and DVRs delivering thousands of commercials that are unique to people? You are really trying to get the message to the consumer to what is relative to them and how they connect to your brand, as opposed to at a very high national level trying to do a reach and frequency without actually knowing what the reach or the frequency is. This is the time the direct marketers will set the pace, as opposed to being at the tail end of the equation.
Q: When do you expect this kind of media buying to take place?
A: The core drivers are going to become mobility and high definition and the choice availability of high definition content. Because of that, you’ll see a lot of emphasis on movie downloads. This year, you are going to see 10% of the population consuming video content that is not distributed through classic formats.
