Online video is riding a wave of popularity that shows no signs of cresting anytime soon -- 14.8 billion videos were viewed online in U.S. alone in January, according to comScore. Yet the medium still has considerable and well-publicized drawbacks. Google has endured a never-ending stream of criticisms for its persistent failure to monetize YouTube, far and away the most popular video streaming website, and marketers are still loath to place their ads beside user-uploaded videos of water-skiing squirrels or potentially pirated material.
Premium content websites have sprung up, and with them come experiments in advertising formats, including overlays, pre-roll, mid-roll and post-roll. Yet, the results have been mixed, and there's a growing conflict among publishers, advertisers, and audiences when it comes to interruptive video ads, as audiences don't want to be forced to watch repurposed 30-second television spots.
"What happens is, nine out of 10 people say 'f*** this, I don't want to watch this ad,' and they go find the content someplace else," Simon Assaad says. "The advertiser paid for delivery, but people are not watching the ad, and the publisher actually loses the consumer. Nobody wins out of that."
Assaad, the co-CEO and co-founder of Heavy.com, knows a thing or two about online video. He's been involved in the medium for more than a decade, dating back to what he calls the "dinosaur age" -- before YouTube kicked in the door, and before MySpace, Facebook, and Twitter let consumers connect and share videos with whomever they wanted.
Even though he's been involved in online video since the early days, Assaad still believes everyone acts like "Neanderthals in the cave" when it comes to video advertising.
The main problem is that advertisers are trying to apply the rules of television to a medium that is unique in its own right, according to Assaad. "Too many marketers are trying to slap what worked in another medium onto online video because they don't want to take the difficult step of creating something," he says. In his opinion, when video is finally monetized, it won't be the result of some new technology or format.
"It's not rocket science. You talk to all these investors and venture capitalists; they're like 'what's the format that's going to make monetization work on the web? Is it pre-roll or an overlay or targeting?' It's not really any of that stuff," he says.
Think of a new advertising paradigm
While others experiment with ad platforms that interrupt a video, Heavy has found the most success with its distinct video skin that wraps around its video player. The skin never interrupts the experience of the video, and offers the advertiser an impression throughout the length of the video. According Assaad, Heavy's video skin sees CTRs four to five times higher than pre-roll ads.
Heavy does run mid-roll ads within the video player, but only at a rate of one per every four videos watched. "During that time, you've seen maybe 12 video skins," Assaad says. "That works for us, works for advertiser, and it works for the audience."
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