You have to wonder just how powerful online video advertising really is.

Targeting is – more often than not – the most significant value proposition that is given to brands from media professionals as to why online video is such a wise advertising investment. With so many types of online video (and this goes beyond the breadth, depth and dominance of YouTube), it’s hard to argue with this simple fact. If a brand is trying to get a message across, there is something deeply profound about being able to target that message to such specific, interested and connected niches and audiences. On the other hand, if a video goes viral, the ability to dump a pre-roll or post-roll on that piece of content can create substantive impressions against even the most illustrious of prime time shows. For years, the argument has also been that online video is that much more cost effective. So, you get targeting, brand awareness and cost savings. That works.

Well, is online video advertising that much cheaper?

Without any data, my gut was telling me that online publishers are keenly aware of the CPMs being coughed up by the major networks, and that they were leveraging their own size and specialty to edge their prices ever-closer to TV in a bid to make a run at more significant advertising budgets. A few weeks ago, Research Brief published a news item, Untargeted Online Tonnage Buys Comparable to Selected TV CPM Norm, that validated this thinking. The article suggests that, "Untargeted online tonnage buys generate much lower CPMs of about $9, which makes them roughly comparable to TV’s all-daypart/all-platform norm… targeted video ads are much pricier, averaging CPMs of $32-33, says the report. In both cases, however, the analysis is comparing 30-second TV CPMs to online video ads, which tend to be of shorter length."

What’s the prognosis?

While more research and reporting needs to be done, the article suggest that targeted online video ads can outperform non-targeted TV counterparts in recall and impact. This is interesting on many levels. First, contextually, human beings are such different beasts when they’re watching TV at home on the couch compared to leaning in and sifting through online video. We’re also location-sensitive. Online videos are now seen while being hunched over our laptops at our desks, gripping one hand to a subway rail as we watch something on our iPhones during our commute to work or while sitting outside with our iPads. Screen size, location, device, platform and environmental factors all play into how effective and how concentrated consumers are when watching these online videos. There’s also the notion of abundance. While we have many more channels to choose from on television and many more specialty and cable options to augment that experience, it is still, primarily, driven by a scarcity model (there is a finite amount of channels and opportunities to advertise), while online video flips that on its head (it’s an advertising model of abundance). Every second, hours of new video is being uploaded to YouTube and, while watching an ensemble of cats dance to Pharrell Williams‘ smash hit, ‘Happy‘, may not be your thing, with a little linkbait love these are the types of videos that generate millions upon millions of views. And, in that same instance, while you may have no interest in some documentary on chemical engineering, it is content like this that offers a corporation a very unique opportunity to connect with a specialized audience.

It’s also about more than advertising.

Online video is also a great place to tell a more personal story… to do something more than simply advertise. Seth Godin often says that advertising is a tax that brands pay for mediocre products (or something like that). Online video should never be solely regarded as the place to just pump more ads into. A smarter – more profound – marketing strategy should focus on building a healthy mix of ads with great storytelling and the ability to produce, distribute and share video-based stories about your brand that you have created.

The real myth of online video.

There is no denying that online video is one of the most powerful tools that a brand can use, but there is still a widely held perception that online video is cheap, easy (and even free) to do. Don’t be fooled. Whether it is buying online video ads (which are very comparable to buying TV ads, if you believe the report above) to creating an online channel of owned content, it is still a laborious, difficult and costly venture for brands. It’s easy to scoff at this notion and point to platforms like Instagram videos or Vine as a cheaper way to accomplish the same goals, but as these platforms grow in terms of audience and functionality, it becomes increasingly more difficult and challenging to be great at them without investing in the talent, production and persistence. Bear in mind that those newer forms of video also have a non-existent shelf life. A video on Vine today won’t sustain much beyond its moment of distribution. Brands need to feed that beast at a voracious pace.

Yes, the same stuff it took to be great at TV has reached the online video world. And, if it’s not quite there yet, the same issues and costs are just around the corner.