Brightroll summit shines light on online video investment gap

November 18, 2013  |  Jeff Fraser  |  Comments

Addressing the gap between Canadians’ consumption of online video and advertiser investment in the channel was top of the agenda at last week’s BrightRoll Video Summit Toronto.

According to a presentation from BrightRoll CEO and co-founder Tod Sacerdoti, Canada is ranked second globally in terms of hours of online video watched each month, and 92% of Canadians watch online video. But from 2012 to 2013, total Canadian advertiser spend on video grew only 30%, to $183M.

Speakers from companies such as Scotiabank and Danone, agencies like Havas and Carat, and measurement providers Nielsen and ComScore discussed the causes and solutions for the gap. IAB Canada president Chris Williams connected slow growth to small per capita budgets compared to the U.S., forcing Canadian advertisers to be more cautious about new digital technologies. He also pointed to a relative lack of standards for measurement and audience-buying in Canada. Other speakers brought up major barriers to adoption such as high CPMs on online video inventory, lack of talent and education, and convoluted workflow and client approval processes.

“The price barrier for us in Canada is enormous as compared to the U.S,” said Azadeh Mahinpou Dindayal, vice-president and business director of Havas Media. “When we take a step back, and try to convert [cost per mile into cost per ratings point], we’re looking at prices that are three times—sometimes four times—what it would cost to reach that same audience in television.”

Much of that cost comes from a lack of efficiency in audience-buying—buying gross impressions means paying for ads that are often not seen by consumers because they appear off-screen at the bottom of a page, on a site in the wrong country, or simply don’t load at all. Buying methods that reduce wasted spend would go a long way to breaking down the barrier.

Workflow problems arise from the hybrid nature of digital video, which is usually categorized as a digital budget item, but from a creative standpoint is closer to TV than display. Tal Chalozin, founder and CTO of Innovid, which specializes in interactive video, said he hopes “people will stop talking about multi-screen and cross-screen and just say that there is a screen.” Consumers are device-agnostic, and watch Homeland or Modern Family the same whether it’s on iPad, Xbox or TV.

“I think the technologies and marketers should follow suit, and say, ‘This is a TV-viewing experience, and I need to deliver the message in a similar way.’”

Better digital measurement is another important step, not only because it opens doors for more efficient audience buying, but because it helps advertisers see the benefits of shifting to digital. “Measurement is really the only source that I’ve seen today that can change, and break through, these limitations that we have,” said Dindayal. “It was through measurement that we were able to create a new model and new currency, and it will be through measurement that we’ll see more play across devices, and not necessarily be biased towards television all the time.”

BrightRoll and Nielsen started the ball rolling with a share-shift study comparing cost-efficiency for TV and online media. The study of 18 U.S. campaigns showed that spending 5% of TV budget on online video instead increased unduplicated reach by 2.5% over a TV-only campaign. A shift of 10% increased reach by 3.6%, and a shift of 15% increased reach by 4.2%. Shifting budget online also increased frequency for consumers who saw the ads on both TV and online, which performed better on brand lift and recall metrics than TV exposure alone.

Although digital video provides a much larger range of audience and engagement data than TV, that potential has yet to be developed. Nielsen has championed the Gross Rating Point (GRP) as a means to make digital and TV measurement compatible and facilitate cross-screen buying, but digital natives complain the GRP doesn’t capture new digital datapoints like engagement and viewabilitiy. “We’re going into a lean-back medium to have that conversation, just so that we can speak the same language. But ultimately, we should lean forward,” said Paul Regan, director of digital media innovation at Scotiabank. “It’s a whole new world, so we have to think about success in a different way.”

Sacerdoti, in an interview after the summit, said that he expects GRPs will continue to dominate budget discussions. “Our customers are saying very clearly that the GRP measure, and the GRP currency for buying digital video, are not only important but where the majority of money is going to move in the short term. So we try not to be too, ‘Win the intellectual battle, but lose the market share war,’” he said.

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