Revenue is still elusive
The bad news is revenue. One senior broadcast executive estimates that for the exact same viewer, revenue from an hour of online viewing is one-third that of television. Some of this difference is attributable to the difference in ad loads. There are 18 minutes of advertising available on broadcast TV compared to the 4 to 6 advertising pods online. Welcome to NBC head Jeff Zucker's "trading analog dollars for digital pennies" world.
Meanwhile, the industry is experimenting with new advertising and creative formats. "At the moment," says Hardie Tankersley, VP of online content and strategy at Fox Broadcasting, "online shows are still TV shows, crammed into a different place. We need to take advantage of what an interactive computer platform does well and develop creative and interactive models for advertising. It is a creative problem more than a technology or business problem."
Advertising agencies are still trying to define the right measurement metrics for premium online video. Dr. Yaakov Kimmelfeld, SVP of analytics at Mediavest, says "there are still challenges for successful planning and making the campaigns accountable. We can measure user engagement, based on viewing behavior. The trick is to tie these behaviors to branding impact and brand ROI."
Standards collaboration
Brands, agencies and networks are collaborating to resolve addressability. The Interactive Advertising Bureau issued guidelines last year for online video advertising standards. And ABC announced its own emerging media and advertising research lab in Austin, Texas, under the direction of professor Duane Varan.
Perhaps most promising is an industry consortium, led by Starcom Mediavest, called The Pool. This unites major advertisers and content publishers to field test the efficacy of online video ad units. Participating companies include Allstate, Capital One, Applebee's, AOL, Yahoo, Microsoft, Discovery, Hulu and CBS. Various online video ad units are tested in markets across the country against the dominant pre-roll format. Findings will be available next February.
For its part, the world's largest online video site, YouTube, offers advertising with its full-length, premium videos. The company has championed overlays, which appear in the lower third of video screens and are less intrusive. However, the format has failed to gain traction with advertisers and most of YouTube's $200 million ad revenue is derived from the less lucrative display ads.
Hoping to validate the overlay format, Google partnered with NeuroFocus, a research firm that applies neuroscience to advertising. Biometric measures like brainwave activity, eye-tracking and skin response were used to measure attention level, emotional engagement and memory retention. Overlay ads scored a respectable 6.6 out of 10.
<< Previous page | Next page >>
