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THE METRICS DILEMNA: Is buying a Video impression the same as buying a TV impression?

Pix credit: http://technode.com/2012/04/19/internet-as-cable-tv/
Pix credit: http://technode.com/2012/04/19/internet-as-cable-tv/

As online videos become a popular platform to advertise on, the shift of advertising budgets from broadcast TV to online video has been perceptible. Over the last few years, many large FMCG advertisers have moved significant budgets away from broadcast TV. However, the shift is still not as dramatic as the movement of audiences. One of the possible reasons for that is that among there is an enduring faith (though eroding) in the efficacy of TV ads and still a reluctance to completely replace TV ads with online ads.

The reality is probably a bit of both. Yes, broadcast TV viewing has been declining and online video viewing has been increasing as proven by the numbers. However, online video has not been able to replace TV for an important reason and that is linked to the way we buy online video.

Internet advertising including videos are bought on either an impression or a per-view basis. So you get exactly what you pay for. If you pay $20 per CPM to YouTube to target females 15+, you will get exactly that i.e. 1,000 impressions with a 5% margin of over delivery. There is little possibility of getting another 500 spill-over impressions that reaches another target audience, say males 15+. However, in broadcast TV things work differently. If you buy 200 GRPs targeted at females 15+ which lets assume translates to 1,000 impressions, there is a 100% likelihood to obtain a number of ‘unwanted’ GRPs or impressions targeted to another target segment such as males 15+. Have a look at the table below, and we can see the extra ‘unwanted GRPs’ advertisers obtain from a TV station even though it has not been paid for! An advertiser who paid to get 1 TV spot in the 9pm drama to target females 15+ gets an audience of 395,000 plus an additional audience of 280,000 without paying extra. This is due to the fact that broadcast TV is unable to split the airtime inventory.

Pix credit:Kantar, Singapore

Moreover, this extra target audience is entirely a bonus as in all likelihood some of the males may also land up buying the goods advertised. Think about the number of times the grocery shopper is a male and you will get the picture. So when TV stations lament the decline of TV at the expense of online TV, they have reasons to be sore....and probably so do the advertisers! Now all we need is ad-serving for broadcast TV!

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