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).
* Note: "Streams" (which includes both streaming and progressive download video) are attributed to the property that provides the stream, including embedded videos viewed on another site.
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:
- Video is and will continue to be the best possible way for an advertiser to communicate brand messaging.
- 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.
Next: The state of video ad integration is a mess, but there's hope.