Online Video Advertising: The Myth of the Inventory Drought

by Randy Kilgore, Nov 20, 2006, 1:45 PM

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We hear it all the time: there's a scarcity of inventory for online video advertisers. Although it seems to be the prevailing wisdom, it's simply not true.

According to the Interactive Advertising Bureau, the top 50 sites account for 94% of all online ad spending. Some quick back-of-the-envelope calculations reveal a significant surfeit of great sites with an enormous amount of available inventory that are part of that remaining 6%--outside the top 50. There's certainly a lot to be said for the benefits of advertising on top sites, but 94% is just a ridiculous number.

Clearly, the "destination" sites--the networks and the portals--are selling out their video inventory, but in many cases that inventory is being thrown in with the TV buy. Then we have the "mid-tail" and the "long-tail." As more and more small and medium-sized Web publishers bring video content online, inventory is exploding. And many of these sites are using video in nontraditional ways.

According to comScore, in both July and August of this year, 7 billion videos were streamed in the U.S. But according to Accustream, in July the available pre-roll marketplace was just over a billion streams. And that billion is highly concentrated on a few large sites.

Shorter ads (:7 - :10) that are designed specifically for online video opportunities create a better user experience and are driving publishers to continue to add in-stream advertising to their video content en masse.

Effective use of video doesn't necessarily have to be pre-roll. Many advertisers are finding in-banner video to be extremely compelling. There is certainly no limit to the inventory for in-banner video ads, and many marketers find that the level of engagement that's available with in-banner video generates a significant brand boost.

Engaging post-roll is an effective option--and as more and more long-form video comes online, multiple mid-roll ads increase the number of ads slots that are available. Many advertisers are also finding successful placements with video sponsorships.

New technologies and formats that are developing (e.g., video chats with ads included, online games with video ads before and between scenes) all add to the potential volume of inventory. And for advertisers lacking video assets, there are still ways to take advantage, including building flash ads to play in video spots.

Finally, there's the explosion of consumer-generated video. Although it scares most marketers to lose their brand in the world of user-generated, still with the usage of behavioral targeting technology, it's possible to find in-market consumers.

Inventory scarcity? Drought of online video ad avails? Not at all. Just a lack of creativity. It's time to wake up to the huge opportunity that's available beyond the top few sites. It's time to look at the long tail, because that's where the volume of video inventory is waiting to be discovered.

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