The use of TV-like ratings to measure online video will negatively affect gross ad spend in the next five years, predicts Ashley J. Swartz, CEO of Furious Minds, in a commentary for Beet.TV on the state of the digital video pricing and measurement. Metrics like Online Campaign Ratings from Nielsen and VCE from comScore might not be in the best long-term interest for video, she says.
“When short-term gain is a motivating factor, it ends up destroying value,” she says in this video report. “Age and gender are great, but when you apply age and gender to online video in an illiquid market, you can’t deliver to the age and gender demand, so you have inventory go unsold…It’s moving CPMs, but moving them in the wrong direction.”
Television CPMs are less than online video CPMs, she adds, and that’s another reason why mingling the two can depress value for digital video. “CPMs will go lower and you will see an overall gross reduction in effective CPMs,” she says. “OCR and VCE…This is equivalency of an online eyeball to a TV eyeball and that’s scary. Price fixing commoditizes marketplaces especially when you have an open marketplace like online video.”
For more insight into CPMs, viewability and the TV upfront, check out this video commentary.