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Tuesday, October 14, 2014

Has Online Video Finally Arrived?


On October 6th, THE WALL STREET JOURNAL published an interview with Daryl Simm, the CEO of Omnicom’s Media operations. He is ultimately responsible for the spending of approximately $55 billion in media across the world.

In the interview he noted that his firm is currently advising their client base to place some 10-25% of their TV dollars in online video.

When I read it, I immediately sent it out to a few friends who responded pleasantly with comments such as: “Wow” or “It’s about time” or “We are already doing that.” Over the next few days, the tide turned and my e-mail box filled up with angry comments largely from local broadcasters.

The passionate remarks included, “Why can’t he just shut up” or “who cares what he thinks, the stuff never works.”

I do not think many of the angry people read the interview. He was quite measured. The Journal reported that Mr. Simm “said that cable and broadcast network owners are getting a significant portion of that money back, since their programming still makes up a large share of the premium online market.”

Mr. Simm also went on to say that, “We look at delivering against segments of an audience. If you are trying to increase your reach against light TV viewers, the answer is to move a significant part of the video budget to online video. We council the client depending on what businesses they are in.”

A few people said a hard and fast percentage is a bad idea. I agree but 10-25% is a pretty big range. He is clearly stating that individual analysis is required depending on the account and its target.

Being longer in the tooth than most of you, I remember when Ted Bates way back in the early 1980’s published their 5% solution. What they were saying was that to hedge your bets and get the total audience for many brands, you should put 5% of TV buys on WTBS, then known as a Superstation. Many in the media scoffed and said all TBS had was Atlanta Braves games and Gomer Pyle reruns. But, did you notice that within a couple of years, cable took off as an advertising medium and then, a decade later, local cable finally got the recognition that it deserved?

Online video may not garner 10-25% of TV budgets next year or even in 2016. The die, however, is cast.

Also, did you notice that today You Tube announced that their Google Preferred ad space is sold out? Coincidence? Hmmm.

Still another train is leaving the media station. Do not get left behind, my friends.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

2 comments:

  1. Don,
    A good read and I wholeheartedly agree! We have found an increased rate in client retention when we sell a digital component (specifically online video) in conjunction w/ spot tv. It's a great (and seemingly proven) method to extend reach via the multiple screen. Our savviest clients jumped on the bandwagon early!
    To your point regarding Google Preferred Ad Space, our CSVN (Comcast Spotlight Video Network) has been sold out for some time. The savvy AEs are closing deals for 2015!
    Keep the good stuff coming,
    Patt

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    1. Thanks, PC. Your comments were far kinder than the broadcasters who wrote to me on my private e-mail. :)

      Don

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