In-stream video advertising is in much the same place now that standard rich media was in 2000. Pubs had different sizes, specs and formats, requiring clients to create "one-off" ad units for each publisher -- not a scalable solution. To compound matters, there wasn't widespread certification of third-party vendors, making it hard for advertisers to run rich media campaigns across sites that all had individual specs.
In 2001, major publishers like Yahoo realized this model was holding back the ability to drive scale and revenue and partnered with leading rich-media providers to set the standards that led to the growth of in-page rich media. Once standards were in place, revenue and market share for rich media boomed. According to the Interactive Advertising Bureau's annual revenue reports, rich media comprised only 2% of total online ad revenue in 2000 but jumped to 10% by 2004.
However, the in-stream video space is more complicated now than in-page rich media was in 2000 because it's more dynamic. For example, there are different video sizes, sequencing issues, proprietary players, etc. But standardization is possible. The IAB has taken the first steps by releasing its Digital Video Ad Serving Template (VAST) and Video Player-Ad Interface Definitions (VPAID) guidelines.
Why You Benefit
Perhaps one of the biggest benefits to publishers is that standardization helps monetize video content. If every publisher is selling the same products, it makes selling as well as buying much easier. As we all know, when the ability to purchase and reach wider audiences is easy, people spend more money. For example, Amazon, eBay and Google's businesses are built in part on this premise: making it easier for people to find and buy things all in one place (whether it's books, collectibles or even ad space).
In terms of in-stream, if advertisers and their agencies can "create once and play anywhere" -- which is essentially what TV buys do now -- they'll be ready, willing and able to focus on this area as a viable and meaningful part of their business, in turn driving more advertising budget toward the space.
In short, once in-stream standards are adopted, agencies will be able to plan their media buys at a scale comparable to other interactive or traditional ad opportunities.
It's All About Adoption
One definition of "standard," according to the Merriam-Webster Dictionary, is "something established by authority, custom or general consent as a model or example." An eMarketer study from Q1 2008 to Q1 2009 shows U.S. online display ad revenue for the largest publishers and portals declined an average of 14%. However, an April 2009 study from Nielsen shows from February 2008 through February 2009, viewers of online video grew 10%. Those numbers show the time is now for publishers to create new revenue, and they can do that quicker and easier by adopting standards for in-video advertising.
In challenging economic times like today, publishers are tempted to (and many already do) differentiate through the creation of their own proprietary in-stream ad products -- a strategy that's short-sighted and short-lived. To put it in context, think of it this way: what if the 30-second TV spot had never been invented? What if advertisers had to build different spots for each station?
There are a lot of viable solutions out there. We did it before, now let's do it again.
Editors' Note What do social media, online video, publishing and metrics have in common? Aside from all being topics that MediaPost publications such as Online Media Daily and OMMA magazine cover intently, they are all part of some fresh new OMMA conference videos that we've posted here for your viewing pleasure and professional development. Don't take our word for it. Come hear journalism savior Steve Brill make a case for online's "paid" model at OMMA Publish. Or listen to CNN interactive marketing guru Andy Mitchell explain how to build a community around news at OMMA Social. Or watch Publicis' Rishad Tobaccowala explain why everything can be measured, but "not everything is necessarily worth measuring" at OMMA Metrics & Measurement. Plus much, much more, including panels, keynotes, presentations, and even some good new insider perspectives from MediaPost's Search Insider and Email Insider invitation-only summits.