If Video’s Battleground is Fought Solely on Cost, Who Wins the War?

Generally speaking, as consumers, we understand that our purchase decisions hinge on two variables: quality or quantity. For instance, do we buy two pairs of moderately priced running shoes, or the state-of-the-art runners with the promise of record-shattering performance? It all depends on your goals and expectations, of course. Are you planning to run a marathon next week, or you looking to leave a spare pair at the gym? The point is, we get it. There’s a given price for a given outcome. 

For those of us in the media planning and buying space - who are spending other people’s money - these same rules apply. Whether we’re acting as agents for brands, or we are the brands, the goal is the same—to drive ROI. So what happens when the focus becomes more about quantity than quality—and what does this do to the results?

It’s easy to understand why a video advertiser might be tempted to take the quantity-first strategy. As a relatively new player within the media world, online video continues to prove its value in terms of ROI. Adding to the confusion is the fact that online video comes in two distinct varieties. There is the more ubiquitous long-tail video inventory, and the premium, television-like programming that costs a bit more. But does it really? Or does higher ROI actually tip the playing field in premium video’s favor? The answer: “It depends what you’re looking for.”

At Videology, we see the demand for both quantity—what generally falls into the category of Real-time Biddable (RTB) inventory—and quality—or the more premium inventory sold in reserved, upfront buys. Each can be used separately, or in conjunction, because they deliver on two very different strategies simultaneously. Reserved, premium buys are more akin to television buying, offering guaranteed delivery at a fixed cost over a given time period. In the end, they offer the same certainty of TV, and adhere to the tried-and-true strategies that brands know move sales.

On the agency side of the house, this premium inventory is often made available through private marketplace exchanges that allow agency holding companies to leverage their premium upfront agreements (scale and price), while holistically managing de-duplicated reach and frequency across multiple partners to drive better efficiency, overlay data, reveal an increase in supply and ultimately better ROI. In the production-heavy, scale challenged world of video, maximizing efficiency and illuminating waste is a clear advantage. 

That is not to say that RTB doesn’t offer advantages for certain advertisers. Undoubtedly there’s value in each of the different media buying models, but the best campaigns are generally driven through a mixture of both. Inventory should be distributed based on what’s important to an advertiser. An ongoing campaign for an established brand with limited targeting requirements may do well with primarily RTB campaigns. A more time-sensitive campaign focused on seasonality, product launches or more specific buying targets may require more of an upfront buying model. Ultimately, a buyer will be using two main metrics to measure the effectiveness of their strategy: performance and cost. 

When it comes to programmatic video buying, when the buying strategy leans too far in favor of cost alone, this often leads down the RTB-only path. In the programmatic digital display world this may work well, as supply is abundant and KPIs are more straightforward. But video is different. Premium inventory is scarce, and RTB campaigns will not always deliver optimally against many of the metrics that brand-centric advertisers value most. 

So buyer beware. Ultimately, as consumers we want choice and brand marketers do too. But let’s not forget that in almost all instances, you get what you pay for. Is it better to purchase at a lower rate and run the risk of not getting all that was expected, or is it more valuable to pay more for better targeting and guaranteed delivery? The choice should be based on each brand’s and product’s KPIs, rather than simply price. If price is the sole battleground, the win may not be apparent in the results, which is what we’re all fighting for in the end.

Ryan Ladisa

Vice President, Sales, Canada

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