Audience figures determine online video ad rates

Tue 17th of April 2012, filed under PPC

Audience comes first

For the first time, a major internet publisher will sell online video ad space according to audience figures instead of traditional pay-per-click (PPC) metrics.

AOL has announced that it is now allowing marketers to buy online video campaigns across its properties based on gross rating points (GRPs). In the advertising industry, GRPs are used to measure the size of an audience - they are calculated by multiplying together the percentage of a target audience reached by an ad and the frequency of views. This approach marks a significant departure from the current norm of paying each time a viewer clicks on a video.

As seen on TV

By focusing on audience figures, AOL seems to be trying to bring its web properties in line with TV advertising. GRPs are widely used in TV and so they will probably appeal most to large advertisers with little or no experience of online campaigns. As if to underline the point, AOL plans to showcase the new advertising opportunities at an event it's hosting as part of Digital Content NewFronts (DCNF) - a joint initiative to teach brands about digital marketing by the likes of Google, Yahoo, and Microsoft Advertising.

Ahead of DCNF, Ran Harnevo, senior vice president at AOL Video, explained: "AOL has a significant volume of high-quality content valued by advertisers and we are excited to take the lead on showing marketers the value and differentiated results we can guarantee."

However, Natalie Booth, assistant marketing manager at theEword, warns that focusing on audience figures will not suit everyone. "One of the key advantages of online marketing is that advertisers only pay when they get a measurable response, such as viewers clicking on an ad. It's obviously positive news if AOL's new initiative encourages big TV advertisers to dip their toes into the web, but they'll find that PPC provides more accountability in the long run."

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