“The Sell Sider” is a column written by the sell side of the digital media community.
Today's column is written by Justin Festa, chief digital officer at LittleThings.
It feels like every other week another publisher is making a pivot to video or a joke on social media talking about why the pivot to video doesn’t work.
After thinking about this for a while, I’ve come to recognize why the pivot to video often fails. Producing video is expensive, failures are common and costly and, even in the best-case scenarios, monetizing video is difficult.
First, what is the pivot to video? In my mind, it is the reaction from publishers who looked at their social media feeds and video ad rates and started thinking, “If we convert most of our content to video, we will be able to reach more people at a much higher CPM.”
There are number of issues here that seem to play out time and time again.
First, producing video is expensive. The average TV show is shot for thousands of dollars per minute. Digital-first publishers can drive this cost down significantly, and if they are really efficient they can end up in the $50- to $200-per-minute range for original, high-quality video.
Unless you are Cheddar, which I have a lot of respect for, most publishers are not able to produce and monetize hours of live programming per day. So, for the sake of this article, I am going to assume that most video segments are short-form in the two- to five-minute range. That still means pubs are spending hundreds of dollars per video, regardless of who sees it.
There is an 80/20 rule for page views on articles, where 80% of the page views come from 20% of the articles, and that holds true regardless of the article’s format. Because of this, the vast majority of the videos produced never actually make it to a broad audience. Video articles are not always just videos; if publishers host videos onsite, they will likely need to entice viewers to watch, so they need an intro or something written on the page to tease the video. Contrast this to the cost of producing a written article or gallery – whether you have freelance writers or in-house staff, the cost will be substantially more for original video.
All Video Views Are Not Created Equal
Publishers that produce video can add them to all their social platforms and deliver them through over-the-top (OTT) apps and a whole host of other ways.
The problem is there is not enough money here. Most social video views go unmonetized, and with respect to OTT, those views are not being adequately valued. Since it’s much harder to determine a user on a connected TV, the ad rates are often lower in the open market for OTT compared to desktops.
It makes sense from a data standpoint, but if publishers are producing video that is good enough to be viewed on a TV, you would think the market would pay them closer to commercial rates for essentially commercial views on a TV. However, that is not the case and leads to my next point.
Highly Monetized Video Views Are Not Easy
This is another assumption I see backfire. Just because a publisher produced a great video doesn’t mean people are going to see it. I see a lot of people running autoplay or sticky players that follow you around on the page as you scroll.
However, unless publishers sell all their inventory directly, programmatic rates for autoplay video inventory are not going to be as high as click-to-play video inventory because viewability and other engagement metrics will be substantially lower. For mobile, it’s very difficult to run autoplay or a sticky player while maintaining the user experience.
So, if publishers are trying to get views with click-to-play video and recognize the full CPM value of the video, they need a way to encourage users to click “play.” Oftentimes that comes with a well-written intro or article talking about the video and why a user should click “play.” It’s difficult, and often a 60-75% play rate can be considered a huge success.
If you have gotten to this step, you now have the added challenge of monetizing video, which is difficult. In my next column, I will tackle the obstacles of monetizing video, as well as advice based on my own experience.