Wednesday, May 15, 2013

Monetizing the 2nd Screen - the debate continues with "Cost per Touch" introduced

A few weeks ago in a blog post on the same subject, I presented the current approaches to monetizing second screen companion and converged viewing experiences in the market place.

Last Thursday, we had the opportunity to put the heart of the discussion to a live debate (audio available here) at the Jefferies 2013 Global Technology, Media & Telecom Conference held in NYC.  We had a "Star-Studded 2nd Screen panel" including Jesse Redness (@JesseRedniss) from USA Network, Tara Maitra (@TiVo) from TiVo, Adam Rymer (@MLB) from MLB, AJ McGowan (@UnicornMedia) from Unicorn Media and Rick Liebling (@RickLiebling) from Young & Rubicam.

We kicked off the panel in discussion with Adam Rymer, discussing how MLB has pioneered both video streaming and second screen in the industry for more than 10 years.  Adam described not only their content syndication revenue approach ($20 a season for the "data only" second screen experience, $125 a seasons for the converged streaming video experience) as well as their experience with 4 Major League Baseball parks for in-park commerce (tickets, concessions, integration with the jumbotron, etc).

Jesse Redniss and Tara Maitra spent a good deal of time discussing display ads on second screen, with Tivo surprising the room as Tara discussed their ad network approach for on demand viewing including "Tune-in" links for major shows (ironic for a product that is often thought of as an ad killer).  Jesse discussed USA Network's approach to metadata syndication, giving them the ability to push their brand and synchronized ads to multiple 3rd party second screen apps.

As we started to discuss interactive advertising and how the market is reacting to a CPM model on the first screen and whether the sync'd ad on the second screen will be monetized in a CPM approach (i.e. a 10% uplift on the CPM) or a CPC model (web ads attract $0.50 - $1.00 per click-thru), Jesse coined the phrase "Cost per Touch".  He illuminated the investor-packed room by describing not only the power of measurement of the clicks themselves, but that we will soon be able to truly understand how consumers are engaging with the brand and content on the first screen (are they switching apps, are they clicking into the actors or the sync'd content, etc).

Rick Liebling did a great job reminding all of us that this is still a very nascent market and the both ad agencies and their brand advertising customers need to be educated on what is possible and what is working for this to continue to gain momentum and achieve real scale in the market place.

AJ McGowan brought us full circle between the analog and digital video worlds, describing why it has been so hard for the last few years for brands and TV networks to monetize their video content in mobile in the same way they have been monetizing broadcast streams.  Essentially, until very recently, video links shared via Twitter and Facebook or even email have been challenged by the need for a client-side app (to count streams for the advertiser, etc), resulting in very low viewing rates as consumers either have to hunt for and download the app or become frustrated while the device switches from streaming the ad to streaming the actual content.  Now that the technology exists to stitch the ad and the content together "on the fly" combined with an industry recognition of matching the pre-roll to the size of the content (ie no 30-second pre-rolls for 30-second videos), networks are starting to see their ad stream viewing rates climb and their resulting effective CPMs climb (they only get paid for completed ad views).  With ad targeting servers from companies like FreeWheel and VideoPlaza targeting consumers in real-time with more and more personalized information, we should expect to see CPMs meet and exceed those of the analog broadcasting world...soon.

So, while I expect this to continue to be the most popular debate in the industry, one thing is for sure--the entire industry is focused on figuring out a way to monetize those consumers we have been smart / lucky enough to engage in second screen companion and converged viewing experiences.

Interested in discussing this with us further?
Check out our Webinar on May 23rd on 2nd Screen Strategy Basics or join us live in NYC at the Chelsea Clearview Cinemas on June 27th for our 2nd Screen Summit NYC @ CE Week where will will continue the discussion on monetization strategies in addition to engagement and the challenges companies large and small face in the industry.

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