With online video sites clocking up vast numbers of viewers, why do so many brands and their agencies seem to lag behind when it comes to getting on board?

Just a few years ago, a management consultant at McKinsey compared the process of viewing images on the web to trying to suck jam through a straw. Those days now seem like a distant memory. 85 per cent of internet users in the E.U. and the U.S. now have broadband, and many of us take the ability to watch video online for granted (unless our corporate IT police force prevents it).

Online video sites are clocking up enormous viewing numbers, with 117 million unique viewers watching 6 billion video streams in the U.S. in January, according to Nielsen. Viewers spent an average of 125 minutes watching the videos.

This does not spell the death of TV. Television is still a powerful advertising medium and a significant amount of the video watching online is effectively TV viewing -- ITV.com, BBC's iPlayer and 4OD are among the most-watched sites in this country. To quote the TV industry's research body Thinkbox, 'TV is not dead; it's having babies'.

Nevertheless, consumers' eyeballs are migrating online and brands must follow them if they are to retain their emotional resonance for consumers. Yet they are not. The dirty little secret of internet advertising is that most of it is search, and most of that is Google search. Google's corporate revenues were $4.8 billion in the fourth quarter of 2007, but Google subsidiary YouTube earned a mere $31m in the whole year! In other words, the internet is being used largely as a direct response medium and its potential for display advertising -- especially around videos -- is being neglected. We see two reasons for this: brand inertia and the difficulty of monetising online video.

Advertisers in the U.K. are conservative. Marketing is not usually an express pathway to the board in most U.K. companies -- far more of our CEOs have a financial background than a marketing background. If the head of advertising does not have the ear of the CEO, there may be more downside than upside to trying something new. If they are going to try something new, advertisers need support and encouragement -- perhaps even a push -- from their media buying agency.

People in media buying agencies are busy. They work hard and they try their best to do a great job for their agency and their clients. But if you ask them, they will readily admit that a lot of their work is fire-fighting: making sure the TV ad aired correctly, that the press ad ran, that the campaign spreadsheets add up, that the next pitch goes well. With regard to display advertising online, everybody 'gets it' (especially the senior people), but it is hard for people to find the time to make it happen.
 
The second, and bigger, problem is that current ways of monetising online video are less than ideal. Video site managers admit privately that as many as 40 per cent of site visitors will click away the moment they see a pre-roll. This is why YouTube uses them so sparingly. The owners of stickier sites, where the content is 'must-have', know that they are irritating their viewers to a greater or lesser extent, depending on the relevance and creativity of the pre-roll. People may be happy to watch a couple of high-quality 30-second TV ads if they are watching two hours' programming on a lean-back medium. Being forced to wait 20 seconds to watch a two-minute clip on a lean-forward medium is less palatable. Overlays (or 'captions') were invented to solve this problem. They seem to annoy the viewer less, but who wants to have a third of their screen obscured by an ad?

Finally, there are companion ads. There is plenty of research to show that we are all rather good at avoiding looking at these.

Help is at hand. Digital placement (also known as virtual product placement or digital product placement) places an advertiser's brand right into the content, where it cannot be skipped or ignored, but it does not interrupt your viewing. Done properly, digital placement preserves the editorial integrity of the content, provides excellent branding opportunities for advertisers, and provides a mechanism to ensure that great content remains free for consumers.

Digital placement employs sophisticated proprietary software to carry out the embedding. Online asset transfer and approval solutions make the process fast and painless. There is a mismatch today between where the eyeballs are and where the advertising money is. Digital placement helps to restore that balance.

Calum Chase is vice president of business development, MirriAd.