iMedia Connection

 

Video campaign traps to avoid

By Michael Shehan, SpotXchange

 

Published: August 02, 2007

 

SpotXchange's president and CEO explains what's holding up online video advertising, and why now is the time to get in.

It's funny to me that people say the online video ad space is moving quickly. As an involved participant, I find that the industry is actually moving painfully slow.

 

Every day we are hit with new reports, studies and data that speak to the power and popularity of online video advertising. You've heard them: 70 percent of U.S. web users streamed video in January 2007 (comScore Video Metrix rankings, January 2007); by 2010, one in 10 dollars devoted to internet advertising will go for video placements (eMarketer, October 2006).

 

And why shouldn't it explode? In a recent meeting I had with the head of one of the world's most prominent agencies, he said that online video ads are going to become especially important to advertisers if you assume the following two things are true:

 

1. Video is and will continue to be the best possible way for an advertiser to communicate brand messaging.
2. Traditional media will continue to fragment, making it increasingly difficult to easily achieve significant reach.

 

So the good news is that earlier reports may have underestimated the size and growth of this market. Even better? Those opportunities remain undiscovered goldmines.

 

The core issue that keeps advertisers from sponsoring video content is simply the lack of technology, creative and industry standards, with integration standards being the greatest barrier to adoption. It's important to note that this is not integrating banners or search listings on a page. This is about delivering real-time video ads into a video player.

 

The IAB and its members are leading the charge to get standards in place, but the current state of the space suggests more time will pass before they are finalized. Unless you live and breathe online video advertising, it's unlikely that you're familiar with the issues holding the industry back. Here is an inside look. 

 

The state of video ad integration is a mess, but there's hope.

 

Integration
Quite simply, the state of video ad integration is a mess. Due to the lack of technology and creative standards, publishers and advertisers are forced to figure out on their own how to accommodate video ad serving and reporting. 

Many video sites looking to monetize their available inventory through video ads think integration is as easy as running Google AdSense or a banner campaign. But it is more sophisticated than that, and more variables need to be considered. Anyone who tells you it is easy is not telling the whole story. You'll know you're in good hands if the following questions are part of the discussion:

 

• Is the video in a FLV or WMV format? Is the video being streamed or progressively downloaded?
• What size companion banner will be served with the video ad? What is the acceptable duration of the video ad?
• How do you enforce session capping and frequency capping? At what point is it acceptable to charge the advertiser for a valid impression?
• How do you stream a video ad from one network while streaming the premium content from another network all in the same video player?
• How can an advertiser use its current ad-tracking or ad-serving vendor?
• What campaign targeting parameters are available to the advertiser: context, regional, behavioral, demographic, keyword, et cetera?

 

Next, consider that skill levels and expertise vary dramatically from publisher to publisher. And each publisher has different technological competencies and, most likely, a different technology platform and video player.

 

Consequently, we now have a fragmented landscape of one-off integrations for practically each online video ad buy. 

 

To make matters worse, the current video ad implementation methods leave much to be desired. Many publishers manually stitch video ads to the content the consumer is watching, instead of calling dynamic "real-time" video ads. Dynamic and relevant ads not only enhance the effectiveness of the advertiser's campaigns but they also dramatically improve the end-user experience. Case in point: Don't you get tired of watching the same video ad over and over again? 

 

Fortunately for advertisers and publishers, all of these obstacles present an amazing opportunity to the vendors and ad networks who seek to streamline the process and connect advertisers with publishers. Companies like mine -- SpotXchange -- launched in November 2006, and Broadband Enterprises, launched July 2007, have developed platforms that help bring publishers, advertisers and content developers together into an online marketplace for buying, selling and placing online video advertisements. Additionally, bigger players are also getting into the game: Google introduced its AdSense video placement offering in the spring and DoubleClick has also announced plans for an exchange for online video ads. 

 

Advertiser adoption
Advertiser adoption is another hurdle. Most advertisers have yet to research and place an online video ad buy despite the countless reports and studies that tout its intrinsic value, especially when compared to TV advertising. In fact, even if budgets for online video ads doubled this year, they would still represent less than 1 percent of the TV ad budgets.

 

A great deal of experimentation exists with early adopters, but we've hardly crossed the chasm and it's easy to understand why given the lack of standards and technological issues. But they also face additional challenges, such as efficiently accessing a critical mass of relevant ad inventory, easily creating compelling video commercials, and lack of knowledge of how to create and manage a successful video ad campaign online.

 

Without video ad networks, it's challenging for advertisers to access a critical mass of inventory they can actually sponsor. The web has two types of publishers. There are the TV networks with big audiences and professionally produced content, which are "safe" bets by advertising standards, but they are largely sold out and are extremely costly.

 

Excluding user-generated content (no one knows how this will be monetized), I would argue that there is a larger pool of inventory associated with professionally produced and semi-professionally produced content. You see this content on sites like Metacafe in its producer rewards program, ClipSyndicate, with partners like the AP, Bloomberg, Fox, Clear Channel, and others, and blip.tv's "Alive in Baghdad," "Crash Test Kitchen," "Amanda Congdon," and "Goodnight Burbank." This is fantastic "advertiser-friendly" content with very loyal, niche- or demographic-specific audiences. However, contacting and coordinating an ad buy with a long tail of producers and publishers is not a realistic option for many advertisers, particularly traditional agencies, who are already pressed for time.

 

Another roadblock for advertisers is they simply lack video creative. The internet is the great equalizer. Unlike TV or other media, almost any advertiser can afford to buy online. Anyone can be an advertiser. However, not everyone has a video commercial. Fortunately, companies like SpotRunner and TurnHere are making the creative process more accessible to all advertisers.

 

Even if they have access to production resources, the questions then become what kind of video ad should be produced and what constitutes a successful campaign? Some of the big questions being addressed revolve around the optimal length for online video ads.

 

• Pre-roll, interstitial and post-roll spots generally vary from extended 120 second ads down to five and seven second ads. So, what is the right recipe for creating a successful online video ad?
• One audible debate among online video advertising circles is that of the 30-second spot versus the 15-second spot.
• Another is surrounding the pre-roll ad: Is it the "new pop-up"? Common sense suggests that playing a 30-second ad before a two-to-five minute video clip would cause the consumer to jump ship, but a recent Online Publishers Association (OPA) study says differently.
• What's more, the same study showed viewers giving a big thumbs-up to the pre-roll when it comes to brand lift.
• Beyond brand lift, what other metrics are important to consider when evaluating the success of a given campaign? Average time viewed, CTR, purchase intent, conversions?

 

Is the OPA study the gospel on effective video ad creative? Certainly not. We are just getting started and that means data and time will write the recipe for effective online video ads. But, the information is a valuable start for advertisers ready to get their feet wet.

 

Yes, the reality is that online video is in its infancy, despite suggestions to the contrary. Regardless of the challenges facing vendors, advertisers and publishers, the opportunities and potential payoff are enormous and they certainly justify the predictions from the web's brightest analysts.

 

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