Lack Of Ad Targeting Keeping Publishers From Making Money With Online Video

Last week I moderated a session at the Digital Publishing and Advertising Conference (DPAC) on the subject of video monetization and syndication strategies for publishers. We had a great mix of panelists represented with Matt Wasserlauf, CEO of Broadband Enterprises, Johnny Boston, President of Raw Digital and Lynn Bolger, EVP  at comScore.

While we discussed many topics including the best content approach for increased traffic and ad revenue and the many different advertising formats, the discussion was all about making money today from online video advertising. I asked for a quick show of hands in the room on how many attendees were content publishers, at which time more than fifty hands went up. I then asked, how many publishers are making enough money today from online video advertising to cover anything more than your distribution costs? With that question, the room fell silent and not a single hand out of the more than fifty went up.

And these weren't YouTube style publishers and independent video creators in the room. These were some of the largest online video publishers across many different industry verticals. After the panel, I spoke to many of them about their specific business challenges and what they needed in the market to be able to truly monetize their content. While answers varied, the number one complaint from all of them was that online video advertising still lacks targeting which keeps CPM rates lower than they would be if the right ad was being targted to the right user. I complained about that myself during the session saying it was bad enough I kept getting Gillette Venus women's razor commercials on MSNBC.com, but even worse was that MSNBC.com delivered me that same ad eight times in a row before I got a new ad.

While I keep hearing online video advertising networks and platforms say they do targeted advertising, non one seems to be using it and I question whether or not the technology even works. Major publishers aren't targeting ads to viewers even though it sounds like this is what they need to be able to charge a higher CPM and start to cover more than just their distribution costs. And until publishers can target the right ad to the right user, based on demographics, many publishers are going to have a hard time ever making money from their online video.