Lack Of Online Video Data and ROI By Companies Is Hurting The Industry

Reading this months Fast Company, which has an excellent article about bottled water and how American's spend more money on bottled water than they do on iPods or movie tickets, there were some great examples of how in other industries, companies seem to be willing to say what something costs to buy or what the ROI is or potentially could be. I see a lot of this in many other industries from many companies willing to give details, but we see it from very few companies in the online video industry.

For example one of the stories in the magazine was about a band who's song was used in an video game by Electronic Arts. It gave exact numbers on how many games were sold and exactly how much money the band made. In another article, a woman who runs the lifestyle marketing for Toyota's Scion brand was explaining how much money they spend on marketing their product around musicians and she was up-front when asked how that leads to financial success for Scion. She replied, "The honest answer is we don't know. Anyone who says it can be measured is flat-our lying".

My point is this. Why is it that so few people and companies are willing to talk about success or failure, with data and numbers in nearly all facets of the online video industry? Asking any major website what online video advertising CPMs are and you won't get an answer. And if you do it will be such a range that it us completely useless. Ask many content delivery networks what the average price is they charge per GB and typically you won't get an answer. Ask any of the major networks how successful their online video initiatives are and you'll be told they are successful, but no metrics will be given to validate that. Total eyeballs or streams delivered is typically the only number you hear and large traffic does not mean something was successful or profitable. Ask what is costs to sponsor online video content and you won't get any details when it comes to numbers. Ask many content companies what their cost is to produce a program and how much it then costs them to distribute it online and numbers won't be discussed. And of course, revenue numbers are near impossible to get from anyone.

The real question ask is why doesn't one of these companies just share numbers on one project, or one online video campaign or some facet of their business so they can show a real ROI? Show something, set an example and give others something to strive to want to emulate to make this industry into a truly new business.

It's a shame. At some point, you would think some of these companies would want to stand up, give out the details, set the example and be seen as the leaders in any facet of this industry. Setting the example and being a leader would help others strive to follow your lead and push this industry forward. Without that, all this mention about "success" is just a bunch of marketing talk. Think of the publicity that any company would get if they backed up their words with data. They would become the example for others to follow, they would get tons of exposure for showing a successful venture and it would help to kick-start some real data sharing. I don't care if these big content companies and websites are only making $1 after all is said and done, that's a profit and others can learn from it. Everyone is too cautious with data, no one wants to stand up and take charge and in the online video advertising world in particular, no one is sharing any data on CPM pricing, sponsorships rates, viewership data etc... the only data that is shared is generic or high-level with no details.

When I ask for data for an article or blog post, it's funny how many times, the company will say, "who else are you speaking to about this article? did they give you any data?" And when I say no, then they don't either. Snooze. What a missed opportunity to have not followed what everyone else is doing but rather lead the pack by example.

I know, many will say I am asking the impossible or talking about something that is unrealistic. But that's not the case. It is all about thinking outside of the box, trying to foster change and drive this industry forward faster.

Comments

[Corey Kronengold]

Dan- There is something interesting about success and failure when it comes to video. So many missed opportunities to learn and share. I raised a similar issue about two weeks ago on our company blog. http://blog.tremormedia.com/?p=15

Too many people sitting back and waiting for the official, unequivocal, indisputable best practices before getting their feet wet.

[Adrian Payne]

Dan – Here are a couple of reasons why companies do not share information. Companies don’t want to give their competitors a starting price to under cut them. I believe this is traditional thinking. As the internet has proven, content is king and users are drawn to quality content.

There other reason is sponsors don’t want their competitors to know how much they are spending on packages. This is a valid reason and you have to protect the interests of your sponsors.

I work in a niche market with plenty of competitors in the auto racing entertainment field. We have been doing video streaming since 1999 and have tried a number of different models. Within the last three years, the focus has been on running live online streaming events as a stand alone business. The first experiment I did was a subscription model and it broke even. This model had its advantages but the growth potential was very limited so we quickly went to the ad supported model.

Here is an overview of how our banner advertisement is structured. The ad inventory is sold by viewer minutes. In other words, the advertiser pays only for the minutes watched in the video stream. If the advertiser wants to purchase more minutes at any time they can. Our current ad banner package starts at $5,000. For that price you receive 500,000 viewer minutes (yes ½ a million viewer minutes!) along with an integrated advertisement banner. We work with the advertisers to ensure they are getting their ROI.

There are so many opportunities for advertisers to tie in their product or message in this medium. I am working on a package for advertisers to sponsor entire events as well. The sponsor may not want those numbers disclosed so I wouldn’t be able to share them with you.

It still amazes me why advertisers buy ad spots on TV and what do they get in return? You don’t even get to interact with a customer.

I hope this answers a few questions. If you have any more let me know.