Commentary

Clarifying Some Basics About Online Video Advertising

Online video is of huge interest to digital marketers right now, and barely a week goes by without research on its continuing growth in an otherwise stormy advertising environment. That being said it is a very new medium in many senses and a number of misconceptions do exist.

Perhaps the largest misperception about online video advertising is that it's one amorphous entity, yet this couldn't be farther from the truth. As with all digital advertising, issuing a blanket statement to encompass an entire industry does a disservice to the various companies in the industry that introduce innovative technology and are dedicated to connecting brands to the right set of consumers whom they want to target. The truth is online video advertising is currently divided into two complementary parts; in-stream video ads and video display ads. Both can be highly effective for marketers, but they should not be confused.

In-stream video refers to ads that are inserted into the video being watched by the consumer. In-stream advertising does not equal overlay video ads partnered with user-generated content. Overlay ads are a component of the in-stream experience, along with pre- and post-roll ads. This full spectrum coverage enables publishers to monetize content from start to finish and advertisers to deepen user engagement via precision targeting and branding effectiveness achieved by ads tightly enmeshed with the video. The OPA and Dynamic Logic's study in November 2008 showed that in-stream video is the best current option for marketers to achieve their branding performance goals; far better than display ads and much better than video display ads.

Video display ads live outside of the content window. A time tested digital strategy now significantly bolstered by the inclusion of video, video display ads are showing an increase in engagement over traditional display advertising across the board. Upgraded with video the rich media banners, boxes and full page takeovers can provide a broad reach alternative for marketers seeking to get the most out of what many publishers may consider to be remnant display inventory.

Why the confusion? Sure conspiracy theorists will point to bad actors who look to sell one thing and deliver another, creating noise and confusion but frankly I just think it's mostly because its all so new. It's also due in large part to the word that appears in both formats: video.

This chart can be helpful in breaking down the different formats that populate in-stream and video display ads, and distinguishing video from display ads:

ad placement/video table

Clearly I am a fan of in-stream video advertising. I think it's like going to a fancy steakhouse and ordering an exquisite cut of steak that comes with melted Roquefort cheese on top; the Roquefort becomes part of the steak experience. The same cheese on the side just isn't as tasty. But hey, others may think differently and importantly the Roquefort is better than plain steak in all instances.

That online video advertising is projected to become a $4-5b industry over the next couple of years is not surprising. It reflects the changing media landscape and uniquely melds the successes of what has worked well for 50 years offline with what makes the Internet so special and effective. That said it is very new and needs more clarity. A greater focus on transparency and clarity will only help online video grow more quickly and achieve marketers' goals.

3 comments about "Clarifying Some Basics About Online Video Advertising".
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  1. Vincent Vandeputte from You View.tv, July 22, 2009 at 9:51 a.m.

    the problem with in-stream video advertising for me is that the viewer didn't ask for the 'Roquefort Cheese', suddenly, without prior warning his quest for information or entertainment is being hindered by an unsollicited ad. In an age where the consumer is King and the internet user watches video often as a result of a Search Query, this is not acceptable. We at You View tv believe the future of Online Video Advertising lies in qualitative Branded Video Content where the advertiser shares expertise with the viewer, giving the user new information or even teaching him new skills. This has been our approach with our sites, one of which has already become the biggest Culinairy Website in our language (Dutch): www.LetsCookit.tv We are rapidly expanding to new countries now and are releasing new niche video websites in the coming months.
    Author: Vincent Vandeputte, You-View.tv

  2. Tony Anderson from Incline Video, July 22, 2009 at 3:26 p.m.

    <SP>
    Good article Bill. I plan to stay in online video for awhile as I too see the vast opportunities this media offers brands.
    <SP>
    I've had some great success with Overlay ads and was one of the first beta testers to integrate them into the DoublClick Ad Exchange through a Video Ad Network I did consulting for. The key with Overlay ads is to implement the same behavioral targeting capabilities as display ads. Do this and you have a high performing creative that works for both branding and direct response clients. If you're already doing prerolls and/or companion ads Overlay ads can compliment that mix and create a distribution source
    that did not exist before. <SP>
    <BR>
    Tony Anderson
    <SP>
    650-690-7566 Office
    <SP>
    415-518-9643 Mobile
    <SP>
    http://GenYMediaInc.com
    <SP>
    tony@genymediainc.com
    <SP>
    http://www.linkedin.com/in/tonyanderson
    <SP>
    http://www.facebook.com/tonyjanderson
    <SP>
    http://twitter.com/real_tony
    <SP>

  3. Vaughan Denny from vaughan denny, July 24, 2009 at 12:14 p.m.

    Nice article - it always helps to clarify the difference between in-stream and in-banner ads.

    i disagree with Vincent about the 'viewer shock' associated with in-stream, users ask for the content and want to watch for free so don't worry about the in-stream ads AS LONG AS..... there is frequency capping, there aren't too many of them, they are targetted and are proportional to the content. I think that there is defintiely a role for branded content but for the vast majority of users - they will accept a few ads in exchenge for online video. They've been getting it from TV for years.

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