Tuesday, March 25, 2008

Bad Impression ?

I've spent the past few days grappling with some online video business models and there is one major issue that hasn't yet come to the fore, but I suspect will in the near future.

Traditional advertisers pay three different rates:

CPM - cost for a thousand views of an ad
CPC - cost per click
CPI - a cost per impression

Text ads are unlikely to have a huge brand message and serve to change your mind; even banner ads are there to do one thing: send traffic to where the advertiser delivers it.

However, the real strength of video advertising is the impact it has. Traditional television advertising is rarely looking for instant feedback. Rather, its effect is to gradually build a brand proposition in your mind, so that the next time you're in the supermarket or the car showroom your opinion has been swayed towards the value of that brand.

So, the question is, what is a fair way to charge for the delivery of video adverts on Internet TV - especially when videos can have 'calls to action' such as clickable areas and overlays.

My experience has been that click through rates for video ads - especially when accompanied by banner ads - is very high. (It has always surprised me that teleshopping has been very slow to take off on Internet TV).

So, what is the best way to monetise or to pay for an audience ?

IMHO the brand impression and the click thru are two separate metrics and should be charged for separately. There should therefore be a cost per impression or CPM and a cost per click.

Let's see what the market thinks.

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