Ad rates on leading UK VOD platforms have been slashed to boost take-up, while the IAB has launched standards to secure trust in the emerging format.
new media age understands ITV and Channel 4 have in the last few months cut their online video rates in excess of standard seasonal changes, from CPMs as high as £40 to around £20.
Sources say the channels are keen for ITV Player and 4oD to remain premium platforms for advertisers, despite entrants into the market with wider content propositions, such as SeeSaw.
Errol Baran, head of new media advertising at Channel 4, denied its rates had dropped, saying, “Rates will always move. We have to be as competitive as we can.” ITV refused to discuss its ad rates.
But media buyers told new media age broadcasters have been forced to push down their ad rates from high prices given the immaturity of the market and the rise in supply of online video inventory.
Nathan Cook, digital planner at media agency Cheeze, said it was unsustainable for any of the more established platforms to continue charging high prices.
“As with any new ad format, the start rates are really high,” he said. “It’s a natural process for these to drop as more inventory becomes available in the market.”
Others attributed the fall to other platforms selling against premium content, including Arqiva-owned SeeSaw, which comes out of its beta testing phase next week.
Henry Stokes, head of online display at media agency Mindshare, said, “Bringing in more supply by opening their back catalogue reduces prices. With more long-form content and possibly Canvas coming to market, as well as SeeSaw, it means prices will be reduced.”
An unnamed media agency trading director added there had been a change in price “as the premium broadcasters are facing competition from YouTube and video networks”.
However, another media agency source said, “We haven’t seem any sign of them reducing rates, but we were getting good rates anyway.”
The broadcasters’ moves come as the IAB offers its US Video Ad Standards Template (VAST) to UK publishers, including Channel 4 and ITV, in a bid to secure trust and boost spend in video-on-demand.
VAST allows advertisers to plan and manage pre-roll, in-stream and display ads across a range of publishers’ video sites by embedding code which enables campaigns to be managed from one place.
The IAB expects its entire Video Council, which includes YouTube, to sign up to the initiative shortly.
It aims to push pre-, mid- and post-roll spend beyond the £12m spent in the first half of 2009 following 200% year-on-year growth.
Online video is still without a standard metric, with the Broadband Measurement Working Group (BMWG) yet to create its promised metric for video-on-demand ads.
Richard Foan, MD of ABCE, a member of the BMWG, said the group was working to implement a standard metric. “The BMWG, consisting of the BBC, ITV, Channel 4, Five, Sky, BT Vision, Virgin Media and the IPA (with BARB as observer), continues to meet regularly to share lessons to date and build agreed metrics for the measurement of VOD,” he said.
Jack Wallington, head of industry programmes for the IAB, said VAST would build confidence, tackle the fragmentation of video ad servers and offer brands reach.
“Until now publishers have handled video separately. Unlike display, where there’s one place to run large-scale campaigns, advertisers have to go to each video publisher individually. It’s a real barrier to getting massive reach. And some agencies don’t have enough faith in the reported figures,” he said.
Tim Hussain, head of video and mobile ads for Sky, welcomed the extra efficiency VAST would bring. “Publishers being VAST compliant means it’s quicker and easier to roll out new ad formats and campaigns across multiple players,” he said.
Nick Welch, EMEA digital commercial director for Turner, said, ’”The reporting it allows is important because having standards the whole industry can adopt makes the business more grown up and brings a level of maturity to video.”
This story first appeared on newmediaage.co.uk