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RSSLast month, Bear Stearns' report, "Internet Video: Still the Next Frontier," asked, "Where would we like to be but cannot currently get to because of technological progress?"
We would like the entire Internet ecosystem to monetize video, but the lack of ad delivery standards is creating major barriers. Video player technologies can be reworked -- but is an ad agency really going to ask its advertisers to wait three months while every major network client rewrites its video player to accept that ad format? No, they'll stick with TV.
And there is the problem: Every video publisher has a different video player implementation unique to its needs, and creating new avails and accepting different ad formats means re-engineering. Today there are no ad delivery standards or solutions that are implemented across all video players.
The good news is, our industry is evolving. The first half of 2007 was all about getting video on the Internet. The second half of 2007 was expanding beyond one type of ad format. Today, the promise of video advertising resonates, and the consequences of not achieving industry scalability across all players and distribution points are beginning to be understood.
Recently we watched a video publisher integrate one ad network's technology to accept a specific ad format. But the company quickly realized it was trapped. It could not sell its own inventory, create new ad avails or accept ad buys from other sources. Essentially it was locked out of the market and its monetization opportunities dwindled as it went through yet another engineering phase! Once the company found a way to accept any ad buy, its revenue opportunities were unlocked; it now claims to have increased revenue four to five times overall.
It is clear that online video publishers are going to have different video player implementations. Accordingly, a primary area of technological progress that needs to be made in order for online video to become a real, dependable profit center for the entire ecosystem -- not just the lucky few who find a solution on their own -- is the adoption of solutions (standards) that allow the industry to scale. Included as part of these solutions must be:
1) The ability to accept any ad buy, any format, and create any ad avail on any player. 2) The ability to control player functionality (pause, start, seek). 3) Ensure the actual ad delivery to the video player - all the time! 4) Integrate with ad management systems (campaign tools, ad servers, and reporting systems).
We all know that with scale, the entire Internet ecosystem will finally monetize broadband-delivered video, and we'll be a giant step closer to the realization of the Internet converging into the living room.
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But having said this, ads within the videos seem quite acceptable just like the television where it is sandwiched between two breaks of an episode.
The plea for standardisation seems a little too early also as Internet is a hub of creativity and it should take some time before we see some sort of standardisation.
As advertisers continue to look at the Internet through traditional lenses, they will continue to ask for "scale."
There simply aren't enough good user-generated and uploaded videos that achieve millions of views. There is the occasional viral hit, but those are one-in-a-million -- i.e. not enough to build a "media buy" on. Further, even if produced content is delivered through broadband, the audience has fragmented so much that no single piece of great content will have the same mass scale as an episode of Seinfeld did years ago. Again, not enough to build a "media buy" on.
So while you accurately point out that industry standards are necessary -- "the ability to accept any ad buy, any format, and create any ad avail on any player ..." etc. the entire Internet ecosystem will NOT support the type or quantity of advertising that traditional advertisers want, not to mention users will be turned off if forced to watch pre-roll, post-roll, or interstitial video ads in the videos they want to watch.
great piece, though. thanks for sharing your thoughts.
- Augustine