• by Aaron Martens , November 13, 2007

The recent news from Google regarding the launch of "video units" that allow third-party AdSense publishers to generate revenue by embedding ad-anchored YouTube players on their sites, coupled with the competing AdHoc Widget service from blinkx which enables anyone to embed blinkx video clips on their web pages, blogs and social networking profile pages, are steps in the right direction, but one important thing is missing from the equation:  seeking impressions for sake of mass distribution and mindshare is no longer an effective method for either brand marketers or direct response advertisers. The only derivative of mass distribution online is intrusiveness and lack of control, which completely contradicts the religion of today's savvy online consumers. 

Online video advertising can easily realize its full potential if advertisers learn to effectively leverage its inherent advantages so that it continues to be engaging and relevant. It's easy to stick with what's familiar and repeat the mistakes of the past by simply replicating the traditional TV advertising model on the Internet.

It's been said many times before and has been documented in countless number of surveys and studies and is absolutely worth repeating here: People want complete control of their every media experience and are not afraid to go head-to-head with those advertisers who don't abide by the rules. Conversely, people quickly befriend those brands who do it right. 

There are way too many choices for consumers to continually endure pre-rolls, roll-overs, over-lays, etc. that invade everything we value and expect from our online experience.  If we as advertisers don't respect our consumers, they certainly will not respect us. Isn't it about time we listen to the consumer now that the Internet actually provides a real voice from each person?  We have all asked for a one-to-one connection, let's start using it correctly. 

In the old model, we listened or watched our favorite radio or television programs and gave our attention to the program's sponsor in return. This transparent advertising value exchange has stopped flowing in our favor a long time ago.

The Internet, and more specifically, online video, gives consumers the control over their viewing experience that they so crave; however, it can't always be free. That said, if consumers want choice, relevancy and control they can choose a hybrid model that gives consumers and content providers the opportunity to have it both ways.

I know you're thinking I must be crazy, but take for example a content provider such as Gamefly (www.gamefly.com), the leading video game rental company whose model is most similar to Netflix. They have several monthly subscription levels where consumers can have from three to ten video games out at a time. Many consumers enjoy the freedom of this subscription model, but suppose their subscriptions could be reduced or even free simply by watching a few relevant online video ads, that they choose and watch when they want each month?  Research has proven that people will watch advertising instead of paying for content as long as it's under the right circumstances.

At first glance this may not seem so unique, but look closer and you'll notice that Gamefly is removing advertising from its content and giving their members a choice. It's a fair exchange and balances the advertising equation. Gamefly is a video game subscription provider, yet it has embraced an advertising model in order to bring another level of value to its new and existing members. Gamefly receives its revenue in either scenario; consumers receive their content how they like it, paid for out of their own pockets or by advertisers.

Another example is Major League Baseball's Web site -- www.MLB.com -- which offers two premium online subscriptions for consumers who want to watch live regular season, playoff or World Series baseball games. Consumers can pay for a monthly subscription or watch relevant and targeted advertising when and where they want via an ad network portal that will subsidize their monthly subscription fee. Again, another example of how to remove advertising from the actual content and let consumers choose how they want to receive their content: ad-supported, or ad-free via subscriptions.

Virgin Mobile's Sugar Momma (Mobile Insider, August 23, 2007:  http://blogs.mediapost.com/mobile_insider/?p=109) is another great example of how this hybrid advertising/subscription model can work when executed properly, actually delivering value, relevance and choice to the end user.

We have an opportunity to reinvent the model and reset the advertising value exchange. We as advertisers have a choice to do it right and do it better than before -- or to keep doing it the same way. Which will you choose?