• by Cheryl Kellond , May 12, 2010

Monetization is critical to digital video growth. We've all seen stats about consumption and spend, like these from Forrester that point out that with users consuming more online video than ever, marketers are set to spend more than $1 billion on online video advertising in 2010. The upward trend for this consumption and ad spend is strongly on the side of premium content.

However, if publishers aren't able to fully monetize their online audience, they risk cannibalizing traditional TV revenues -- and the content consumers really want to watch will not be available online. On premium long-form content, the goal can be the same revenue load per show as television, but the ad experience to get there needs to be more engaging and diverse so as not to negatively impact viewership.

If the goal is engaging viewers and growing viewership as well as making sure monetization efforts hit parity with traditional TV, where does a premium publisher start? What ingredients are critical to "make the dough rise"? What are the first investments? Which ingredients do online video publishers need on their list in order to build a profitable online video business?  In short, what is the recipe for success for online video publishers?

Wonder no more! Here's a home-brewed recipe for online video publishers:

Ingredients:

·       One ad platform

·       One video ad server

·       One or more video ad networks (optional)

Directions:

Prepare the foundation with an advertising platform for publishers:

An advertising platform lays the foundation for monetizing online video. A good platform will be aligned with the direct sales model that most premium publishers use and will help them kick up the following "nutrionals:"

"Nutritional" Info for Online Video Recipe

·      Boost ad load and revenue with a diversity of formats that will not hamper video consumption.

·      Take player engineering out of the advertising equation.

·      Empower sales with new ad experiences that attract new advertisers and help close larger deals

·      Accept third-party media buys.

·      Provide deep engagement and interaction metrics -- beyond basic ad server tracking -- that support premium CPMs and guide ad-load optimization for the total consumer experience.

There is a catch, though. Most publishers become bottlenecked with the influx of ad campaign content that is filtered through operations. Therefore, it's best to implement a tool or process for ad fulfillment workflow that enables scale by eliminating errors and automating time-consuming steps, including:

·       Tracking all phases of ad fulfillment with audit trail for all stakeholders.

·       Testing ad creative within live video player environments.

·       Automating preparation of complete ad packages for ad serving.

Because an ad platform lays the groundwork that will allow for scale and profitability, it is the logical first step for a publisher's digital video business.  The ad-platform-first approach is also best if the publisher's goal is to start driving full loads and revenues quickly; using an ad platform to drive new revenue opportunities can deliver results in a matter of weeks.

As online video publishers navigate their way to profitability and premium content owners look to distribute more of their content online, the role of the online video ecosystem becomes exceedingly important, and complex. This step-by-step "recipe" is not a catch-all system, as each video syndication strategy is unique. However, if video publishers aim to achieve revenue parity with traditional TV advertising, an operationalized and streamlined approach must be implemented to eliminate inefficiencies and maximize profit.