Monday, July 27, 2009

Online Video Advertising: Finally Getting Some Respect?

After years of confusion and endless trial and error, it seems the media industry is finally figuring out how to more effectively monetize online video with advertising. And while online video viewing is still miniscule compared to TV viewing, effective ad formats that provide reasonable revenue streams to content providers and do not aggravate viewers will open a flood gate of great content.

The pre-roll has gone from pariah to relative acceptance thanks to shorter, more entertaining units and better targeting. Simple tools like countdown clocks that tell you how many seconds to the start of the actual video also make the pre-roll more tolerable. CNN uses this tool quite effectively.

Although the consumer refrain “I don’t notice the ads” seems more relevant than ever, it’s hard to argue the effectiveness of a single ad, playing 12” from your face while you wait for a piece of content you requested. (All the more so with the audio track being pumped through your earphones.)

Traditional 30-second ad units also work well in a longer form premium content environments like Hulu. But the ad load is far smaller than on the corresponding TV airing. – one unit per break, representing ¼ of the TV commercial time. Hulu’s plan is to charge more for the ads based on performance.

It will be interesting to see the results of Comcast’s highly publicized new Web-TV trial which will include significantly more ad time than Hulu. It will foster some meaty discussions between advertisers and networks on the market value of a low clutter environment.

Overlays are also finding their place and seem to work best in informational content. At driverTV, we are seeing 3% and higher click-through-rates for the lower screen overlays accompanying our new car video overviews. You can see a sample here:

The other truly compelling aspect of all online video advertising is the additional ad messages that can live outside the video player and reinforce the in-video messaging

All in all, it seems like a recipe for growth: great content along with advertising you can’t skip or ignore.