The former Eyeblaster executive, current CEO of Falk North America and recent addition to the Klipmart board of directors, discusses online advertising.
Joe Apprendi has been an interactive marketing leader for seven years. Currently, he is the CEO of ad server Falk North America; formerly, he was an EVP at Eyeblaster. Recently, Apprendi joined the board of directors at Klipmart, a streaming video provider.
In part one of a two part series, Apprendi ponders rich media industry developments in the coming months, barriers to growth in online video and the future of Flash.
iMedia: With your experience at Eyeblaster, you have insider knowledge of how the rich media industry began and is currently playing out. What can we expect in 2005?
Apprendi: A very different market environment compared to when Eyeblaster debuted in 2001 and solidified a leadership position in 2003. Flash ad delivery in any format (floating, banner, expandable, etc.) is quickly being commoditized by third party ad serving providers and proprietary publisher solutions. Differentiation and value-add is certainly more difficult to demonstrate today versus two years ago. Flash is now the standard and video is the new rich media. The process of online video creation, quality assurance, delivery and reporting is far more complex than generic Flash delivery. Expertise, scalability, and reliability in online video are paramount. This is why Klipmart is growing so fast and why it’s not as rudimentary for third party rich media or standard ad servers to automate this process.
iMedia: Lots of firms provide some form of streaming video. What interests you about Klipmart?
Apprendi: Klipmart has been streaming video for over five years. In fact, they pioneered it. They have more experience than any provider in the marketplace and there are plenty of nuances to the process that can’t be overlooked. They have an incredible track record in the marketplace, from uncompromising display quality to advanced video reporting metrics to best-in-class client service. This, coupled with universal publisher acceptance, gives them a clear advantage over the competition. Now that agency and marketer demand for video advertising is ramping, Klipmart technology and experience positions them perfectly to capitalize on this burgeoning market.
iMedia: What are some of the barriers to widespread advertiser adoption of online video?
Apprendi: The online advertising market (publishers, agencies, marketers and technology providers) has a history of complicating a simple value advertising proposition. The key is not to make the same mistake with online video. Let’s keep it simple.
The broadcast and cable advertising market is enormous. Let’s give these advertisers and their video assets another medium for distribution. Klipmart can enable this. Encode once, play everywhere. It’s not a crime to deliver the exact broadcast spot online, despite what the online idealists tell you. From here, we can add interactivity, custom production, and much more.
Let’s get the basics right. Keep the process painless and ensure comparable video/audio quality with insightful reporting.
iMedia: What industries are ahead of the pack in use of streaming video?
Apprendi: Not very different than early rich media adoption: the entertainment and automotive categories lead the way. However, Klipmart is seeing significant growth in CPG, technology, financial, and travel categories. Political advertisers are really gravitating to online video as well. This is unique to online video and I think we’ll see this phenomenon among any broadcast/cable advertiser, no matter what the category.
With the broadband audience at work and at home the majority of online users and usage [is over broadband connections], there is tremendous online reach against any target segment. Believe it or not, it’s not just the brand marketers choosing online video, direct marketers are seeing higher ROI with online video versus generic Flash or rich media.
iMedia: Online can provide advertisers with response metrics that television can’t. How do you measure the success of online video ads?
Apprendi: Undoubtedly [metrics are] a critical value-add of online video advertising. Comparable to how rich media vendors are emphasizing interaction metrics, online video and specifically video-viewed metrics (delivered by Klipmart), are giving advertisers insight on what percentage of the spot is being viewed and how this varies by creative and placement. This coupled with control panel interactions gives advertisers a more comprehensive way to evaluate the ROI of online video compared to other online advertising options. Of course, impressions/clicks are still a must-have benchmark for comparison purposes.
iMedia: Flash/rich media usage has pushed gifs/jpegs to borderline extinction. Do you see online video doing the same to what we call rich media today?
Apprendi: No, not at all. Flash, if not already, is quickly becoming the creative foundation of an online advertising campaign as opposed to gifs/jpegs. It took a long time to educate the market to get to this point. The same education/training barrier doesn’t really exist with online video. The creative folks don’t necessarily have to be trained to use new software or creative authoring tools.
Online, and more importantly, traditional advertisers get it, and they already have the creative ready to run. For advertisers that have chosen broadcast/cable advertising as the foundation of their overall marketing/communication plan, online video should easily become the centerpiece of their online media plan with Flash ads playing a lesser role, especially with the growth of in-stream ad inventory.
You’ll be seeing more studies on the ad effectiveness of online video advertising vs. broadcast advertising. Once released, I’m confident that there will be a measurable dip in broadcast/cable spending in favor of online video advertising. This is great news for the online industry.
Tomorrow, we'll hear more from Apprendi on important issues facing online video advertising. In part two of our interview with Joe, we'll learn what video formats are most successful, how online video reaches audiences spending less time with television, more on the repurposing debate and a discussion on precache versus streaming video.