DoubleClick's Ari Paparo explains that this shouldn't be an either/or situation.
Broadband adoption is moving the online market towards video advertising. According to market research firm Dynamic Logic, online video ads wield approximately twice as much branding power as online advertising in general, and it’s not hard to see why, given the compelling branding opportunities inherent in video. But it’s important to differentiate between the two main categories of video offerings to help understand the media opportunities, technical requirements and strategic implications of this emerging opportunity.
If there’s one thing you need to remember about streaming video advertising, it’s the distinction between “in-stream” and “in-banner” placements. Simply put, in-stream represents the TV model imported to the web -- e.g. you’re watching your favorite "Daily Show" clip on your portal of choice when a 15- or 30-second video commercial spot intercedes. On the other hand, in-banner video is a clip embedded within a banner that often needs to be launched by the user. Although the technology behind each is slightly different, both are designed to offer visuals so compelling that the user can’t turn away.
That’s a quick overview of the two main options, but as a marketer or agency, you don’t need to choose between them. They’re not necessarily an either/or proposition; you can and should evaluate the objective, content and audience of each campaign before you decide.
In this view, in-stream is certainly the wave of the future, with all of the immersive benefits of TV, but without the bathroom breaks or TiVo. Throw in web-style audience targeting and full accountability through interactive metrics, and you have a very attractive proposition to advertisers. In-banner video, on the other hand, has been criticized by some as a gimmicky extension of rich media. In reality, however, both forms of streaming video advertising are innovative ways to get your brand message across. Agencies and publishers are realizing that both in-stream and in-banner have exciting, and very different, roles in media planning. It is misleading to say that one or the other is the “right” solution.
In-stream video, which is the closest thing to capturing a TV experience online, is largely considered a novel opportunity to reach younger, savvier audiences who are migrating away from television. Studies show that this audience is moving from their couches to their desktops and the TV spend is starting to follow. Car ads? Check. Video game launches? Check. Credit reports? Probably not. But remember, even with 50 percent plus broadband penetration in the United States the available inventory for in-stream is extremely constrained -- so there is lower reach -- and the CPMs are sky-high. In fact, Accustream reported that Q4 inventory for in-stream was 65 percent sold out with an eCPM of $25. Now that’s a premium buy!
In-banner video, meanwhile, is an ideal vehicle for building in-depth relationships with a large audience. This is because it is easier to traffic, there is more available inventory, and it’s a more cost-effective media buy. Ads with TV-level production values can be placed in any banner spot, and the same visuals from campaigns during televised events can be used to grab attention in these rich media spots.
And in-banner isn’t limited to the sort of big-budget, branding campaigns we normally associate with rich media. Trying to interest consumers in a mortgage? Why not create a 30-second tutorial on the right questions to ask a mortgage banker? And why not allow users to view the commercial without having to leave the publisher’s website? Then track view-through and conversion activities using established web-based analytic packages.
Did I mention reach? An in-banner campaign can run just about anywhere rich media can. Media buyers can go extremely wide with user-initiated video, and then give specific metrics to clients about plays, average view time, et cetera. Sure, only a small portion of all impressions will include video, but if you want to get that deep viewing behavior, you’ve got in-stream for that.
Vendor support of in-banner and in-stream are widely divergent as well. In-banner can be executed by any of the rich media vendors and some ad serving companies, working either on the publisher side, or directly with the advertiser. In-stream has yet to mature to that level, making each publisher-side implementation unique. It is not uncommon for advertisers to be offered widely divergent metrics from each publisher on their in-stream buy, with some offering only "starts." As in-stream matures, however, there will be standardization and the development of a mature marketplace with multiple vendors, but we should not pretend it's easy to execute a big buy right now.
Overall, the debate about whether streaming video should be presented either through in-banner or in-stream is off the mark. The question should be approached in the same way for any media buy -- whom are you trying to reach, what is the profile of that user, and what is the objective of your campaign? Either way you decide, streaming video is a branding opportunity not to be missed.
Additional resources:
Order the iMedia Report: "The Rise of Broadband and Implications to Marketers and Advertisers"
Ari Paparo is product manager, rich media, at DoubleClick, Inc.