• by Michael Griffin , September 28, 2009

Viewership of online video is up, reports NielsenCo.'s July 2009 "VideoCensus", quoting a 14.2% increase from last year to nearly 136 million unique viewers. That's great news for the online advertising industry, but it begs the question -- if usage is increasing, why isn't the money following? Perhaps because the technology and standardization process just isn't there yet. In short, though video ads in general are increasing, the adoption rate is still lagging.

 

According to a recent study by eMarketer, video ads will account for only 4.3% of overall online ad spending in 2009, a number they predict will increase incrementally to 5.6% in 2010 and 7.1% in 2011. To put those numbers in perspective to traditional media, David Hallerman, eMarketer senior analyst and author of the new report, "Digital Video Advertising: Where's the Money?" said in 2009 that for every $100 advertisers spend on television, they will spend only $1.60 for online video ads. With standards in place, it stands to reason those percentages could potentially increase and dollars could shift to online at a much faster rate.

Benefits for creative agencies

With standards for in-stream advertising, creative agencies will be much better able to efficiently scale their business by "creating ads once, playing them anywhere," maximizing production time and cost. To further stretch their dollars, they can leverage rich media assets and features or even repurpose TV spots for in-stream ad content. Building a foundation for creative submission sizes, interactive functionality and features gives agencies more time and direction to do what they do best-create.

Benefits for media agencies

On the other side of the coin, media agencies can simplify buys by purchasing media across a wider selection of publishers and networks without having to worry about whether the ad will work on a specific site or placement. Really, it all starts with creating a buying model agencies are familiar with -- i.e., TV. The difference is that agencies don't get the measurement from TV they can get from the robust reporting capabilities of in-stream advertising.

That's why pre-roll works -- these 15 and 30-second spots can be bought on massive scale, and incidentally are often repurposed TV spots. At some point in the near future, it would be great to get other fully interactive ad formats such as interactive pre-roll, overlays, bugs and tickers to the same point, as these types of formats tend to offer a more interactive and engaging ad experience for online advertisers and audiences than simple pre, mid or post-roll.

In-stream standardization is in progress now, and the sooner standards are finalized and adopted, the better. All players in the interactive digital advertising ecosystem will get what they want; publishers monetize their site content, creatives get to truly leverage the interactive power capable online, media agencies maximize their budgets and advertisers enjoy improved ROI. In addition, marketers will enjoy the same branding opportunities they get with TV-online video conveys messages viewers can not only see and hear, but interact with and be entertained by. In the end, everyone wins because advertisers gain reach, branding AND measurement, a combination they can't get with TV.