Editor's note: This story is revised from the print edition.
Silver Chalice New Media has begun to sell online video advertising on a cost-per-completed-view basis, a new model that veers away from the traditional method based on a site’s audience reach.
The company, formed by Chicago White Sox owner Jerry Reinsdorf, has instituted the video sales model for elements of its live and on-demand programming, including its college sports material. The model, known as CPCV, seeks to reassure ad buyers concerned that their inventory is being skipped over. Ad buyers pay based on the number of times their spot is seen to its finish.
Hulu, a dominant player in online video, began a similar strategy earlier this year. Several prominent entities in the industry, including MLB Advanced Media, are exploring the model, particularly for live events that do not lend themselves to delayed viewing.
“We’re trying to address concerns out there in the ad marketplace about accountability in digital marketing,” said Rich Routman, executive vice president of Season, a digital ad sales network operated by Silver Chalice. “And we see this as a real differentiator. The reality is that all of us in the sports vertical are very frequently calling on many of the same accounts. This gives us something different and meaningful, and hopefully another tool to siphon money away from TV budgets.”
Among early buyers in Silver Chalice’s CPCV model are Right Guard and several other undisclosed companies.
Routman said the completion rate on the CPCV ads sold to date with Silver Chalice’s network has often exceeded 80 percent. Industry averages have hovered at nearly 90 percent for long-form video content and around 55 percent for short-form material, according to several independent studies.
“Traditional [cost-per-thousand] models are not going away in this space,” Routman said. “But for those hesitant to move more money into digital, this is a very compelling proposition.”
Content powered by Silver Chalice includes the ACC Digital Network and Pro Football Weekly’s digital programming.
