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New Formats Give Online Video Ads Potential

For years, the promise of online video advertising has been just that -- a promise. The reality has been a big disappointment: ads that look and feel like TV, and are repurposed from TV creative, only much more annoying.

The reason for this is twofold: advertisers and agencies were reticent to spend money on new creative for online video, and the video market itself was splintered, and lacked the kind of content advertisers were comfortable with.

But with the TV-upfront market frozen and advertisers looking for lower-cost means to reach consumers, a push is on to try formats that could finally realize some of the potential of online video with targeted ads that engage with real interactivity. "As prime-time audiences decrease, it makes sense to go where the audiences are going," said Chris Allen, VP-video innovation at Starcom USA.

VivaKi, like Starcom a unit of Publicis, is running a yearlong test of different formats for both long- and short-form content known as "The Pool." Earlier this year Reckitt-Benckiser, marketer of Clearasil and Lysol, primed the market with a $20 million budget shift to the web from TV for campaigns on ad networks like Yume, Brightroll and Nabbr.

'Funky transition period'

Meanwhile, a flurry of innovation is taking place across the industry to move marketers away from static pre-rolls and impression-based pricing to different models that take advantage of the web.

"We're in this funky transition period in the industry; the lion's share of what advertisers are doing is repurposing TV creative for video, but some are dipping their toe into new creative and testing new formats," said Hulu Senior VP Jean-Paul Colaco.

The goal here is to lure more dollars online and increase the size of what IPG unit Magna Global estimates will be a $700 million pie in 2009. Nearly 80% of the U.S. online audience watches video, according to ComScore, but the time spent is just 1% of TV viewing, which is a $70 billion market. So an argument could be made that online video is getting its share, but no one here is making that argument, are they?

Here's sampling of some of the latest efforts to reinvent online video ads:

  • CBS, through its TV.com unit, is experimenting with a system that would allow users to earn credits by watching ads. Earn enough credits and you can watch ad-free. It's also experimenting with bigger ad loads. Typically a half-hour show online has two minutes of ads, compared with eight minutes on TV. CBS is pushing that up to five minutes with no measureable consumer blow-back.
  • Tremor Media has rolled out a host of ad units called vChoice that bring interactivity into the player. Viewers can choose the ad they watch, dig deeper into related content, watch a product demo and play a game all without leaving the video experience. Some units allow advertisers to use their existing creative. Others "push the boundaries of what has been done by allowing new, nonlinear storytelling," said Shane Steele, Tremor VP-marketing.
  • Hulu pioneered the choose-your-own pre-roll "ad selector" unit, which allows users to choose an ad, including a long-form movie trailer in exchange for an ad-free episode. The site has also experimented with ad-free blocks where an advertiser such as McDonald's buys up the ad inventory to make prime time ad-free. The Disney-News Corp.-NBCU joint venture has also tried live ads, like the faux "telethon" for Microsoft's search engine, Bing.
  • YouTube introduced its own variation on choose-your-own-ads just last week. Google's video site is trying out a system where viewers can choose to watch a pre-roll ad or a "promoted video," which itself is a media buy. Either way, the view helps YouTube fulfill guarantees made to advertisers.
  • Then there are "engagement" pricing models where the advertiser pays for a specific action, rather than an impression. Video-ad network ScanScout, for example, serves rich overlays that allow users to hover over or click to watch an ad or movie trailer. The network did a deal with Universal Pictures for "Fast and the Furious 4," where the studio paid for a number of completed views of the trailer rather than impressions.

 

Michael Learmonth, Advertising Age. June 29, 2009

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