Online Video Ad Vendors Must Face Standardization Hurdle

guy jumping hurdleStandardization remains the key challenge facing the online video industry, according to experts gathered Wednesday for a panel on video advertising at Jefferies 5th Annual Internet and Media Conference in New York. 

"The largest brands are looking for some degree of standardization," said Matt Wasserlauf, CEO of online video network Broadband Enterprises.

Along with basic formatting and ad placement issues, where are advertisers looking for greater standardization? "What we see with our clients, there simply are not tools in place to price manage their video online," said Christine Watkins, president and CEO of Invision, an ad sales and inventory management vendor for cable networks.

"On TV, we understand what our inventory is, how it's being priced," is what Watkins said she's hearing from advertisers. The online industry, she added, "doesn't have the technology in place to manage the buys."

It was not surprisingly, then, that Watkins was the only panelist on Wednesday who predicted the rate of growth in online advertising to decline this year. "Major publishers and agencies have not yet made the investments," Watkins said regarding their online video monetization infrastructures.

Other panels were not quite so bearish. "We're going to see new models arrive this year aimed at the convergence between TV and online ... and the monetization of content," said Jamie Harper, CFO at Move Networks, a provider of video streaming and technology services. However, Harper conceded, "I think standardization is one of the biggest hurdles we have out there."

Today's market, according to Frederick Singer, CEO of Web video company Grab Networks, is reminiscent of the "doom-and-gloom period" of 2001. "Like back then, you're going to see a dramatic restructuring and a dramatic consolidation," Singer said.

But, added Singer, "the recession is not the fundamental issue." Rather, he said, it is the industry's continued shift in focus from TV to the Web.

Seconding that argument, Doug Stevenson, co-founder and CEO of "in-text" ad provider Vibrant Media, pointed to a recent study, which indicated that 70% of consumers would rather give up the TVs than their computers.

Stevenson, however, then pointed to another study, which found that only 2% of younger online consumers trust advertisers. To that, he added: "We have to change our approach."

Tags: online, video
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1 comment about "Online Video Ad Vendors Must Face Standardization Hurdle".
  1. J A , February 25, 2009 at 2:36 p.m.

    Even as advertisers and publishers sort out standard formats, one oldie but goodie that's gaining traction online is product placement. Placements connect a brand directly with content producers and perhaps best overcome fans' initial objections to advertising. Sponsors should also consider user-gen contests and other means of interacting with viewers which will increase brand lift and long-term sales much better than video advertising alone.