December 2-5, 2007  |  La Quinta, California
Published: December 12, 2007
Pre-roll takes center stage in video's growth

Tremor Media sees pre-roll as carrying most of the weight for the video segment in the near-term, before other models gain critical mass.

Miles Dennison, VP of advertising sales for Tremor Media, had a captive audience during his Spotlight presentation at the iMedia Agency Summit in La Quinta, Calif. One of the leading purveyors of digital video and rich media through its network of more than 800 sites, Tremor has ample data of its own from which to glean trends and make projections, especially when combined with both comScore and eMarketer data.

The company doubled its in-stream business in 2007, with a focus on professionally-generated content -- as opposed to user-generated content. It divides its web portfolio into 18 channels for marketers, as well as providing customization beyond these channels.

"Pre-roll remains hot," Dennison said. "Twenty-seven percent of all video ad spend is in pre-roll, and we don't see that ratio moving dramatically to overlay technology or other alternatives."

Pre-roll has the highest click rates of any ad unit, he reported. And while 15 seconds remains the predominant length of pre-roll creative units, Tremor's own data indicate that the ratio of an ad's length, when measured against the length of the content it precedes, is the most accurate barometer of consumer tolerance of that ad's length. In other words, the longer the content, the longer the average ad will play.

As intuitively apparent as that data point seems, another fact Dennison revealed seems to portend bad news for UGC purveyors. Dynamic Logic reports that 75 percent of all users would visit YouTube less frequently if an ad appeared in front of every clip. This speaks to the increasing role played by overlay technology and user-initiated midstream ad units targeted contextually. Dennison mentioned Digital Smiths, ScanScout and Truveo as companies that Tremor sees doing interesting things in that space.

Closing his remarks with some predictions for the industry's next few years, Dennison listed the following:

  • Network and cable share of online content will go down, replaced by user-generated and semi-professionally created content. This is expected to help further the digital ad market.
  • More video ads will be created for online use only. The Online Publishers Association has projected that as much as 40 percent of all new creative will be generated for online use only by 2012.
  • Consumer Packaged Goods (CPG) will be the largest spender of online dollars in the next three to four years. Research firm eMarketer has projected that CPG spending will pass entertainment and automotive in 2011.
  • Contextual targeting will become much more widely used in the next year or two, with so many questions revolving around the efficacy of behavioral targeting for video and so many of the leading video companies employing contextual algorithms in their models. 

Dennison concluded by saying that primarily what clients want is guaranteed impressions. This is why he sees pre-roll as carrying most of the weight for the video segment in the near-term, before other models gain critical mass. 

Brands and marketers that want to drive more awareness, such as entertainment buyers with movie trailers, will use an increasing amount of viral and social network media/UGC for their campaigns. And buyers wanting to leverage broadcast assets for additional lead generation, such as financial services companies, will be the biggest players in performance. 

Pointing to the eMarketer numbers for growth of the video segment, Dennison pointed to a robust opportunity for each of the entrenched players in the next year and beyond -- as has every other observer of this extremely hot segment of interactive.

Mark Naples is managing partner for WIT Strategy. Read full bio.