Bad online inventory costing advertisers
A lack of transparency and poor quality inventory for online video is costing advertisers, experts have warned.
However, complacency – from both advertisers and media agencies – has, it has been argued, only compounded the situation.
Ashley MacKenzie, founder and CEO of Base79, one of YouTube’s biggest partners, said: “There is just not enough quality inventory and that’s the truth.
“The amount of inventory – genuine, quality, engaging inventory – that MSN, Yahoo! and AOL produce is not that high.
“If an advertiser or a media buyer isn’t going to trade to the terms of Google or YouTube, well they don’t have a chance to go and find other inventory. It’s not there.”
MacKenzie said that this is also forcing advertisers to use intermediaries who buy low quality inventory. “But then you’re locked in,” he said. “You’re feeding the beast.”
The comments were initiated at MediaTel’s latest Video Upfronts event after a panel discussed the recent blinkx controversy – in which the online video search company was accused last month of using software to inflate traffic counts and capture commissions.
A Harvard Business School advertising researcher, professor Ben Edelman, claimed in a blog post that blinkx had close links to companies which used “deceptive tactics”, muddying the waters over what advertisers were actually paying for and whether consumers actually viewed online content.
Although blinkx “strongly refutes” the assertions made and conclusions drawn by Edelman, the news has forced the industry to ask serious questions about online video advertising and what role advertisers need to play in ensuring the current model works.
The solution, MacKenzie argued, is seeing advertisers initiate change “from the top”.
“Because of the way the ecosystem is built, the advertisers have to come in and say ‘no more’,” adding that the industry has a “structural problem.”
Audience measurement company Nielsen has said that advertisers need to plug knowledge gaps about the way the market operates.
“Something is not quite right, but [advertisers] lack – at the moment – the knowledge to know what exactly it is that is wrong,” said Nielsen’s Andrew Bradford, VP, client consulting.
“The fact that the underlying structure of the Interweb has been built in a very slap stick way means it sometimes inhibits transparency and accountability.
“But advertisers have been lazy. They have not sat on digital and said ‘what does that mean and where does that come from?’ They are beginning to, but they spent quite a long time relying on others to make those judgements for them.”
“It’s a function of a very complex ecosystem and it’s simply taking a very long time to get to the bottom of it.”
Videology’s business development director, Julien Lamour, said that the rise of programmatic – in which the ad trading process is automated – is a possible solution to some of the issues.
“Programmatic platforms will continue to contribute to…improved transparency and that’s something I’m optimistic about,” he said.
“But ultimately, it is still work in progress.”
Programmatic trading is forecast to grow from a $12 billion global industry in 2013 to $32.5 billion in 2017, according to forecasters Magna Global.
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