What Should You Pay to Advertise, Place Product on or Sponsor an Online Video?

Jump Off TV is a Hip Hop Media, Sports & Entertainment destination, featuring original video programming, a social network and the latest news and gossip. Their Key Stats tell us that they have over 10,000 daily and 300,000 monthy unique visitors, over 1.5 million monthy page impressions, 27,000 registered users and their Alexa ranking is 46,000 (Looks like it may have dropped a little.) It's demo is Male: 70% Female: 30% and it's visitors are UK: 45% US: 45% Other: 10%. I'm told by Jump Off TV that the one of their shows, "Being Charlie Sloth" ( A weekly reality show which documents the struggle of an independent artist adapting to the new digital landscape thas the artist playing the different characters of his manager, video editor, web designer and producer as they confront typical music biz scenarios and discover new technologies.) averages 200K views per week, with majority coming from worldstarhiphop.com and all that is great info for a potential advertiser to have. Most of all though, I like their little sales video from 2007. "Wow that's great Tim but what should I pay to advertise, place product on or sponsor an online video?" Well, that depends on what you want to do and by the way, I am glad you asked. In a lot of ways buying web video advertising and sponsorships is like buying traditional media except the marketplace isn't set up yet. We don't have a Web Video UPFRONT yet so advertisers can't by advertising a season in advance and because of that online video shows don't get funded in advance that often. It's a shame because the kind of shows advertisers want to advertise on happen to be the kind of web series that web video producers want to make but they can't be made because the money isn't there. No networks are really in place to fund that gap. Producers can't fund shows themselves or really commit to a regular delivery schedule of their shows and most online video producers/publishers don't have an idea of what their advertising inventory is let alone have a media kit with prices in it. We have some work to do. But as Damon Berger once said, "The tracks are laid, the money train shows up in '09." so we better get busy. If you are a brand manager or advertiser who is new to online video advertising and sponsorships here's a quick lay of the land in the Independent world where you can currently find some great deals to get your brand, product or service seen by millions of targeted consumers for far less than what you would pay for TV. Best of all you will be able to track your results to see if you are getting an ROI. Don't wait too long though, studies are showing that the Economic Crisis Will Make Online Video A Champion in 2009. Advertising vs Sponsoring vs Product Placement Just incase I have some readers who have never done advertising, sponsoring or product placement before I'm going to explain the difference between the three. Adverting is when a video ad is produced once and you buy placement everywhere you want your video ad to play and then that video ad runs for the amount of time you have negotiated. Sponsoring is when you pay to have a mention, either video, audio or both. Something like an announcer saying, "This Episode of French Maid TV is brought to you by mdialog." and you see the mdialog logo at the same time. It could also be a on camera mention by the host of a show as well and could be longer or shorter depending on what you negotiate. Product Placement Product placement is when you pay to have the host of a show or an actor in a series hold, use or walk by your product or have a visual of your product or service shown in some way. You know when you see a Fed-Ex truck in a movie or Tom Hanks is holding a Fed-Ex box in one of his films. The Two Costs of Web Video Advertising There are two main things you will pay for in web video advertising: 1. The creative The actual video spot or a billboard with voice over. It's the thing that talks about, shows or demos your product or service. 2. The Placement or "Buy" Where your creative is seen and how many people will see it there. Some sneaky advertisers have talked online video producers into giving them the production of the creative for free or the placement for free but those days are coming to end because they weren't a "Win Win" and producers can't stay in business by giving away the studio. You need to pay for both the production of your creative and the placement of your creative. Unless of course you think your video will go viral all by itself by just posting it on YouTube. Good luck on that. Let me know how it goes. Pricing If you already have a short 5 sec-10 sec video (that's right. you don't want to have a long 30 sec TV spot on the Internet - viewers don't like them.) ad already made and formated for the web you should expect to pay between $5 per 1000 views to $100 per 1000 views or a flat sponsorship fee. The big determining factor in pricing is how targeted and how popular the established online video or videos you want to advertise on is/are and what you are able to negotiate with an individual producer or a video aggregator. Sponsorships can vary as well but if you have found a targeted online video that has 100,000 views per episode you might think about offering the producers $2500 for placement and pay extra for having them produce the creative for you. You could base this $2500 on a week if they have a regular series or $2500 for 100,000 views or if it's a small video that has the audience you really want just a flat $2500 for the sponsorship. Some video producers will scoff at $2500 but it's a good starting point for conversation. Especially if you already have your own creative produced or pay for the production of the creative. As for product placement? It really boils down to how much you are willing to pay for targeted trackable views and what you are able to negotiate. If you have a really cool product that the producers of an online video series love they may be more than willing to use it as part of the story because they love it. If your product is run of the mill but you need to get it out there use the $2500 price to start and see where you go. Video series with millions of views know that they are worth more than $2500 and will tell you so you might want to jack that up a bit if a video is listed in the Tubemogul Top 40. If you are interested in advertising on a particular video series or video podcast (keep in mind videos downloaded and played on an iPhone, iPod or Zune have more intimate engagement and may give you a great ROI.) you will need to make sure that the video producer/publisher has the ability to dynamically insert your video ad or is willing to edit it into their video or videos and if they are interested in promoting your product. Some independent content producers can be very picky about what products or services they advertise and that can be a good thing for everyone except the people with crappy products and services. Remember an online video or video podcast doesn't have to have millions of viewers to be valuable to you. It just has to have the target audience that you are after. If you don't have an ad ready to go the online video producer of the web series you are interested in advertising on might be able to help you create one for extra money or you can post a listing on sites like Zadby or you can use a do it yourself service like AdGrinder. How much does it cost to produce an online video ad? Well, that's like asking, "How much does it cost to go on vacation?" It really depends on what you like and where you want to go. If you have a really great idea of a guy walking down the street with a home video camera, you can shoot it yourself and there's no editing you might get away with it for free. If you are good at uploading photos, videos and audio AdGrinder will let you create your own ad for $99 by uploading your photos, videos, graphics and voiceover to their site. If you want a guy running through traffic throwing paint on cars your budget might go up just a little. If you want someone else to produce a spot for you or produce a longer video prices are going to vary but you need to be spending thousands to tens of thousands to make it a "Win Win" and get a video that's going to move the needle for you. Be sure to see some of their previous work before you award them your job to produce. In traditional TV advertising the rule of thumb has been to spend 10% of the TV advertising time buy on the creative. So if you were buying 1 million dollars of advertising time you might spend one hundred thousand dollars on your commercial. Things are a little different in online video advertising right now but they are changing and changing fast. Now is a good time to test the waters. Especially if you have a product or service that is sold on the Internet. Once you have your 5 or 10 second ad ready, whether you made it yourself or hired someone else to produce it, you will need to decide if you want to buy pre-rolls (spots that play before a video), mid-rolls (spots that play in the middle of a video) or post-rolls (spots that play at the end of a video. Since not everyone watches a video all the way through pre-rolls are going to be the most effective in getting viewed but they are also the most annoying. (I still won't buy Sam Adams beer cause their radio commercials drove me nuts years ago). What ever you decide to do make sure the person selling you the placement can show you independent tracking of the videos so you know how many times it was viewed and ask if they have any other statics they can provide you with like time of day viewed or if they know in what state or country the views happened. It's also a good idea to set up a special URL that appears in your spot so you can track visits like the one I'm using in a video title How To Download Audio Books: FrenchMaidTV.com/Audiobooks Where if you like you can get a FREE audio book courtesy of French Maid TV. When it comes to paying, everyone is different but it's a good idea to break your payments up based on milestones so that it's a Win Win. With sponsorships of French Maid TV I ask for 50% of the agreed upon sponsorship amount upfront, 25% upon completion of principal photography, 12.5% upon delivery of the first rough cut and 12.5% upon final delivery. For a straight forward advertising deal I would recommend 50% upfront and 50% upon the running of your spots but the Internet is a dangerous place and many producers/publishers are wise to ask for 100% upfront before the spots run. I've heard horror stories of producers not getting paid by agencies for 180 days to a year and I don't think those deals work well for anyone. All that said, if you want to go on vacation it's much easier to buy a ticket on a bus, plane or train than to build your own train and lay your own train tracks to get you to your destination. The same is true in web video and video podcasting. Right now in web video you could just create your own video and post it on YouTube for free. If you know what you are doing or have hired someone who understands what it takes to make a video organically get a million views you might get lucky and get that. If you create a video that looks like a traditional TV spot chances are you aren't going to get any views on YouTube or anywhere else without paying for it. Keep in mind you don't hear too many radio commercials on TV. TV is a different medium and just like TV is to Radio the Internet is to TV. TV commercials don't work on the Internet unless they are extremely emotionally engaging or a Super Bowl Commercial. Be sure you know what works and what doesn't work in web video or hire someone who knows how to emotionally engage millions of viewers. It is much, much easier to place your video on someone else's show or pay for a sponsorship to get your marketing message out through web video so do and do it the right way. You wouldn't want to get rained out on your first vacation. There are other options in web video marketing and advertising but I'll save them for another post at a later date. What do you think you should you pay to advertise, place product on or sponsor a web video? If you have a brand, product or service that you would like to market with web video shoot me an email at 1TimStreet at G Mail Dot com. If you are an online video producer looking to get sponsors or advertisers send me a link to your video. If you have no idea what your are doing yet and need a little help getting started I'm available for consulting.
  • http://www.davidaugust.com/ David August

    Product placement is said to typically cost $60-$80 per 1 thousands views (CPM), but it would be interesting to hear about different scales/models.
    http://www.viciousconcepts.com/details/2008/09/product-placement-is-priced-at-60-80.php

  • http://1timstreet.com 1TimStreet

    Thanks for the comment David.

    Sharing information right now is going to be key to jump starting web video advertising/sponsorships and product placement for web series.

  • http://www.alexa.com/data/details/main?url=www.fortunehotels.in Users can now create their own search engine! Thanks to alexa!

    In the face of the tough competiton, Alexa is coming up with more and more user friendly and unique features. Ability to create own search enginem by giving access to the crawler is quite a novel feature in itself.

  • http://www.jumpoff.tv Ara

    The key turn with product placement will surely be when there are networks and marketpalces created for this as there is for banner advertising say.