Larry Goodman Interview

3b0a6a2a-c.jpgSpotXchange President and CEO Michael Shehan sat down with former CNN President of Sales and Marketing Larry Goodman to discuss the online video ad space.

Michael Shehan: Why do you think traditional media buyers are moving slower than anticipated to online video ad buys?

Larry Goodman: There are three primary reasons. First, the creative community has not adopted, or gotten used to the fact, that not every commercial or video execution will be a 30-second spot. This group of people should be using different length units more frequently and creatively. Next is the measurement factor. Still, neither Neilson nor comScore have a media rating counsel accreditation, and people are concerned about measurement. Finally, the most important reason is content migration. We’ve seen a lot of recent announcements from broadcast networks that are moving their content immediately onto broadband. Of course the cable networks have had that for a while. ESPN and CNN in particular have dominated the Web audience with their videos. Now we are seeing ABC, CBS, NBC, and Fox who are saying, ‘Hey, wait a minute. We’re going to get there, too.’ All this legitimizes online video. So, as more and more content moves, more and more dollars will move with it.

MS: How should media buyers compare their online video ad buys with traditional buys?

LG: There are three ways: audience potential, targeting options, and response rates. At the end of the day, the online marketplace is more measurable and accountable than the television marketplace. The metrics are real and are reported in a way that can be measured and tallied. We have greater niche opportunities to zero in on the target audience. Measurement and accountability are considerably higher, so for an online buy versus a traditional buy, the comparisons for an advertiser are very favorable. I’m not saying that an advertiser should abandon traditional television; I’m saying that it makes more sense to move dollars to online video to follow the audience, and to take advantage of the better targeting options that online video provides.

MS: Are online video impressions worth more or less than TV impressions?

LG: It’s a supply and demand market, and at the end of the day, supply and demand will determine pricing. Right now, the demand for online video is actually pretty high and the supply is not as high as people would like. So, CPMs have been fairly healthy. If you look at how ad dollars flow, they follow content and consumer adoption. Models like SpotXchange have all the necessary ingredients, buyers and sellers can transact transparently and simply in a real-time exchange.

MS: Do the early days of online video ads remind you of your early days at CNN?

LG: It reminds me a lot of my early days at CNN, particularly the enthusiasm for it among advertisers and agencies. The models for buying and selling are evolving. Companies like SpotXchange, which are leading the industry toward a transparent and easy-to-use buying and selling solution, are further accelerating that growth. I think it’s inevitable that the advertising industry eventually goes to an exchange-based model, both for television and online video.

MS: What issues did early advertisers have with CNN when considering an ad buy on the first all news cable channel?

LG: They had an issue with a distribution that wasn’t fully national. They had an issue with ratings because it was measured very differently than broadcast networks were measured. Some of them even had an issue with the content, because back then, CNN was often known as the ‘chicken noodle network’, which I believe Tom Brokaw or one of his peers coined. Of course in 1991, when CNN became world-renowned for it’s coverage of the first Iraq conflict, that ‘chicken noodle network’ reference disappeared completely, and the broadcast anchors were forced to admit that CNN had kicked everyone’s tail in the coverage. That put CNN on the map in terms of content. In the early days, there are similarities and differences. Online video has ubiquitous distribution, which CNN didn’t have, and online video is incredibly measurable, which CNN wasn’t back then. The biggest thing that’s going to drive online video is really the migration of quality video content to the Web, and that migration has accelerated rapidly over the past six months and shows no signs of letting up.

MS: What advice do you have for agencies that are trying to sell their customers on using online video advertising today?

LG: My advice is that it’s the highest growth area in all of media. Look at television, print, newspaper, radio, and outdoor. Online video is a rocket ship and the rest are a 1972 Volkswagen. There is no comparison. Agencies will increasingly recommend to the client that they follow the increasing number of consumers who are accessing online video, and support that with ad campaigns that attract those consumers’ movements.

MS: Do you have any fun stories about working with Ted Turner?

LG: In the old days, Ted used to go out on sales calls. We took him up to Wells Rich Greene, which then was the last agency hold-out in cable ad spending. They had a real blue chip client roster, like Procter & Gamble. As the meeting got started, Ted told the head of Wells Rich Greene, ‘I usually like to give an update on my company. But today I want to listen, because as you know, we’re not doing any work with your agency and I want to find out why not.’ He was told, ‘Well, Ted, I anticipated that, which is why I have my senior management crew here. If it’s okay, we’ll just go around the table and I’ll let everyone give their thoughts and concerns about Turner Broadcasting and we’ll talk about it from there.’ The first person launched into a dissertation that essentially reported that Turner doesn’t have the fresh and original programming that the broadcast networks offer. When he finished Ted asked, ‘Can I comment now?’ Ted’s response went something like this, ‘Great, thanks. Every day when I wake up, I rub my eyes and I think it’s good to be alive. I walk over to the window and open the curtains and look outside. Some days it’s sunny, some days it’s raining. I’m happy to be here either way. I look back in the bed and there is usually a beautiful woman in there, sometimes two, I’m happy with that. Then I go into the kitchen and have a cup of orange juice and a cup of coffee.’ And then he starts screaming. He goes from talking calmly to absolutely thundering. ‘Then, every day I do something fresh and original. I take a fresh and original shit. That’s exactly what the broadcast networks have on. Shit. Murder of the week, disease of the week, news you are embarrassed to watch. What do I have on? What is not fresh and original about Jacque Cousteau? What is not fresh and original about National Geo? What is not fresh and original about news from around the world that you can’t get anywhere else? What they’ve got on is fresh and original shit, just like I do every morning. What I have on is quality programming that you can be proud of…You’re telling me I’m not fresh and original? I’m telling you they’ve got shit. And I’m telling you they are buying shit.’ With that, he gets up and walks out of the room, and everyone is sitting there in stunned silence. Now, I had set the meeting up and I figure I better go out there. He’s spitting in his tie, his hair is standing up. He is screaming as he’s saying all this stuff, he’s just going absolutely ballistic. So, I run out to the elevator. I’ve been with the company three years. He was so pissed off he’s liable to fire me for even bringing him up there. He’s got the elevator button pushed and he sees me coming out. He walks right over to me and gets in my face, to the point that his nose and my nose are about two inches apart, and in a real low voice he says, ‘So, Goodman, how do you think it went?’ The reason I tell this story is two weeks later we got our first order from Wells Riche Greene. Ted had a way of reading audiences and doing something that was so outrageous, so unforgettable, and so spontaneous, that you’d say the guy was an absolute genius. He just had a knack for always doing something that would leave a lasting impression-even if the impression was one of a crazy man.

MS: Any last thoughts you’d like to mention?

LG: Recently I’ve had a chance to talk with a number of senior-level people in the ad industry, and everyone has said exchanges are inevitable and they will improve the business significantly. So, I am encouraged to hear that from the buying side. Ultimately, the buying side will be the selling side. If the buying side says we want to use an exchange, the selling side will conform-particularly if you have the leading agencies onboard.

Explore posts in the same categories: Mike Shehan, Newsletter - SpotXchange Insight, SpotX for Media Buyers

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