Online video — particularly mobile video — is the fastest-growing advertising medium in terms of spend.
Facebook and Google have been leading that charge. Almost 9 in ten US advertising executives polled by eMarketer say they plan to run a video ad campaign on Facebook in the coming year, while 81.5% said they were prepping YouTube ads.
But at least one marketer is not convinced by online video.
Sir Martin Sorrell, CEO of the world's largest advertising agency holding group WPP, said at his company's H1 2015 earnings presentation on Wednesday that he "can't emphasize enough" how worried clients are about measurement when it comes to online video.
The industry standard for a video ad to count as a "view" is a minimum of 50% of the video in view of the browser, watched for a minimum of 2 seconds or more. Facebook has a three-second rule for viewability if any portion of the ad is in view on its autoplay video ads (although it is testing charging only when an ad is 100% in view.) YouTube follows the 50% for two seconds or more standard, but it also offers its famous "TrueView" format where advertisers only pay if a user opts to not skip the ad and watches for at least 30-seconds or to the end of the video (whichever is less.)
Sorrell said he was speaking to a client this week who said they were seeking higher standards for the "three Vs": Viewability, verification and value. He did not specify the name of the client.
Referencing YouTube and Facebook video, Sorrell said the client suggested "it's all overplayed and that the video focus and the value there is not proven."
"This is a really big issue," Sorrell added.
He went on to criticize (as he has done before) measurement company Nielsen, which the US TV industry relies on for its ratings.
"Nielsen data we think is not up to scratch because it overestimates online and underestimates offline," Sorrell said, referring to the fact that TV ad buys are transacted using Nielsen catch-up viewing data for up to three days after a show first aired (known as C3.) WPP and its media buying arm GroupM want the industry to transact using Nielsen C7 data — measuring catch-up viewing for up to seven days after.
He suggested that some of the catastrophic decline TV networks have been witnessing could be due to a lack of efficiency of the industry's measurement systems.
His client told him that the ad industry had "gone too far in digital and accepted lower standards in measurement, viewability, and value" and that Adland needs to "swing the pendulum back." Sorrell didn't outright agree, but said it was a "really interesting point of view."
Of course, Sorrell has some skin in the game when it comes to measurement. WPP has a data investment management division in Kantar Media, it has a $300 million stake in internet measurement company comScore, and it has a stake in TV measurement firm Rentrak. He said during the presentation that WPP "would very much like" comScore and Rentrak to pool their resources to come up with an alternative to Nielsen data when it comes to TV.
The concerns of Sorrell and his client come at a time when TV audiences are declining at a massive clip, as this chart showing US cable and network ratings indicates.
For the first time ever, there was a significant difference between time spent watching TV and the amount of ad spend directed toward TV. Meanwhile, internet and mobile advertising spend still hasn't caught up with time spend, marketing a $25 billion plus opportunity in the US alone.
But GroupM's futures director Alan Smith warned that what we "lazily refer to as digital hoovers up a lot of money that actually goes to TV broadcasters and [traditional] publishers" so there might be a lot of misattribution going on.
Furthermore, WPP presented this slide to investors about the response to print advertising versus digital advertising.
Sorrell also mentioned a study from researchers at Ebiquity that found that, on average, £1 invested in TV pays back £1.79 in profit, more than any other medium.
Online advertising isn't going anywhere — digital spend will approach $60 billion this year in the US alone — and WPP itself has forked out a ton of money on digital advertising companies like AppNexus. But WPP seemed to be suggesting today that it pays not to get too carried away by the hubris that surrounds the advertising industry's shiny new toy — or declarations of the death of traditional media — before there are more efficient measurement standards in place.
