Revised Expectations

A few weeks ago, eMarketer drastically cut back its online advertising forecast, based on the IAB's/PWC's numbers, separating out video from rich media.

The revision says two things: 1) eMarketer forecasts (and the same should probably be said for Jupiter/Forrester) are definitely more art than science, and 2) the economic environment will keep online advertising slow longer than expected. No doubt, in better economic conditions, the video ad market would benefit from more generous budgets, test-friendly moods, and experimentation. On the side of the content owners, the networks would be going along, pouring more money into digital content expansion and being more aggressive with user experience guidelines, for example, further limiting pre-roll to 10 seconds instead of 15.

On the topic of revised forecasts, about five years ago, an analysis took research firms to task for providing overly rosy forecasts by then comparing against actual numbers. It would be nice to see accountability in forecasts again.

Video and BT

I agree with eMarketer's Hallerman in the most recent Behavioral Insider blog entry (Video is BT's new BFF) that behavioral targeting (BT) will eventually come into play when there's more video inventory. Besides, how can you not love a blog entry that uses the acronym BFF?

Even now it could be applied to UGC and short-form content. But my take is that UGC will be on the lowest rung of the video pricing ladder and will continue to be dominated by overlay units rather than any pre-, mid-, or post-roll. Many, if not most of this inventory, will be sold on a CPA basis, and video ad networks will come into the forefront - it's the monetization (and arbitrage) of remnant inventory all over again. So BT will definitely play a role.

Then, as we go the next rung up the video pricing ladder, BT can also play a role with short form professionally produced content as well.

As you go higher up the value ladder, BT will have the least influence with premium first run shows online. They will still command premium rates and there won't be enough eyeballs generating the supply, especially with the networks offering makegoods on audience shortages with digital makegoods. The most profitable aspect of BT is taking remnant inventory and tripling or quadrupling the CPM with data. You can do that high ROI at the bottom rung of the value ladder but not at the top.