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3 ways to spark video advertising growth

3 ways to spark video advertising growth Dave McCarthy

Google's long awaited decision on how it's going to get some payback on its YouTube acquisition has sparked considerable debate in the industry. We seem to be in an interesting place right now as far as video advertising is concerned. Publishers are increasingly optimizing their sites to accept video ads in the hope of growing revenues; the growth of UGC shows no sign of slowing, and consumer eyeballs are continuing to shift online. And yet, against this backdrop, video advertising has got off to a somewhat shaky start.

One of the key issues is content, well, good content anyway. It's only a relatively small percentage of brands that'll risk aligning themselves with the glut of UGC out there. For those advertisers, there are some major early mover advantages up for grabs, but for the majority of brands, the reality is that content -- good content -- to wrap video ads around is still relatively scarce. There's an interesting disconnect at play here; much of the content consumers find appealing is just not appealing to advertisers and brand owners.

And then there's the format of the ads themselves: 15 second, 10 second, pre-roll, post-roll, mid-roll, overlay. There's precious little valid research out there to prove what really works both from a consumer "engage / enrage" perspective and from the delivery of hard and fast results. Video ads are delivering relatively low clickthrough rates, a fact that's putting off the direct response marketers, traditionally the early adopters of emerging online ad models.

These various issues affect a number of different stakeholders: content producers, technology providers, media agencies, creative agencies and advertisers. The fact that so many stakeholders are involved has resulted in us reaching something of an impasse, with nobody really leading the charge, and the model is struggling to build momentum as a result. Indeed, from an agency perspective, many planners and buyers are reluctant to push a model that is still so unproven, particularly when established performance marketing models such as PPC, with its lower cost of entry, offers such measurable results.

So what's needed?

At the moment, CPM rates across many sites strike me as just too high. The ad networks will help here. While the networks have been somewhat slow getting into the video advertising game, we're definitely moving in the right direction now and that should help stimulate growth in the market by decreasing CPMs and enhancing targeting. Then, as the market grows and the performance levels of ads increase, so, too, the CPM rates will start to increase, as we've seen time and time again across other online ad channels.

Audience is a key piece here as well. We need to develop video ads that audiences are actually comfortable with, and this is where the creative process needs to play a bigger part than it currently is.

We need to develop creative that fits with consumers' current online mindset, rather than rely on our TV-tarnished perceptions of what works when it comes to ads. Video ads online need to be more entertaining than traditional TV spots if they're going to build any level of engagement; they need to give something back. The rules of engagement for web and TV are poles apart, a case that is highlighted by the way people consume content across the two platforms. "Lonely Girl" and the ubiquitous Mentos and Diet Coke clips wouldn't work offline in just the same way that many offline program formats wouldn't work online. Exactly the same is true of ads. Many in the industry are getting too tied up with format: get the creative right and the format becomes far less important.

Saying all this is one thing, but finding a CMO willing to commit above-the-line budgets to the creation of online spots is quite another. I think that piece of the jigsaw will rely on two factors: scale and targeting.

As the networks grow, they'll address these issues for video ads sitting in standalone implementations. However, it becomes more complex when video ads are wrapped around existing video content. Targeting here will rely in a big part on advances in audio and video search. The Holy Grail is for sound and motion search technology that can effectively interpret the content of online videos. Once that becomes a reality, we'll start to see levels of targeting virtually inline with existing, text-based contextual targeting. That would open up UGC to a far broader swath of advertisers, solving the content piece and providing the justification for the ad spend.

Video advertising will be big, of that I've no doubt. It'll just take a little time.

Dave McCarthy, is senior VP/GM, advertising, MIVA. .


to leave comments.

Commenter: jeff stanley

2007, September 19

I really feel like video advertising has the opportunity to break down some of those barriers...the industry needs to embrace and evangelize that notion. After all, this ad model is in the 'genre' of where all of the big bucks are still going (TV). I think we have a great opportunity to 'strike while the iron is hot'.

Commenter: Dave McCarthy

2007, September 19

Good point Jeff. We do need to start giving these ad formats credit for the branding that they deliver and stop worrying about CTR and CPA as much. As an industry though we have been slow to give online advertising any branding respect, or even more important, branding dollars. We're just so used to hard and fast ROI results from our online campaigns that it's hard to break the habit and look to the web for branding. It will get there though.

Commenter: jeff stanley

2007, September 19

I am interested in peoples' thoughts on this concept: As an industry, specifically when it comes to video advertising...shouldn't we STOP talking about clickthrough rates as a measured standard (REQUIREMENT) for an effective campaign. I mean just stop talking about it as a requirement. Do any of the other mediums even have the opportunity to present such a VALUE to marketers? Online is not a passive medium. Add to that the fact that you can actually ‘close a sale' w/in a few minutes and I say our medium is selling itself short. Especially when you think of the potential value that Online Video (not passive, now has the emotional impact, ability for true 2-way communication) brings a marketer vs. TV. It seems to me that we have jacked up the equation somewhere along the way. Instead of 1+1 = 1.5 (and us trying to make excuses)…shouldn't the equation be 1+1 = 3 because our medium can bring so many more valuable marketing aspects to the table?