Commentary

The 'Cadillac' Of Online Video Advertising

Most online video advertising today sucks. It essentially comes in two main flavors: annoying (pre-rolls) and distracting (auto-play banners and overlays). And if you look at where money is being spent in online video advertising today, it is weighted heavily toward the annoying end of the spectrum.

The good news is that brands are evolving their approach to online video and experimenting more aggressively with longer-form videos that can stand on their own. In response, a new standard is taking shape that prescribes best practices to both the creation and distribution of these videos. You could call this standard the "Cadillac" of online video advertising.

How did we get here?

Most online video ads can trace their roots to television ads, which come in the same basic flavors described above. They are designed to interrupt the stuff you want to watch with stuff you might want to watch (but probably didn't). These ads don't warrant their own attention; they leech attention away from what you elected to watch because they cannot stand on their own.

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The problem with this model is that a growing majority of online video consumers are more likely to click away or simply ignore these types of ads. According to YouTube, 70% of its users responded that they would rather not watch a video at all if it carried pre-roll. Online viewers' attention span is shorter -- and, even more important, their patience for unwanted interruptions is growing thin.

Interruptive messaging is anathema online, where every piece of content is effectively on-demand. The path away from these forms of interruptive advertising will be a long one, given the scale of television advertising and the endemic attitudes of advertisers toward these types of traditional advertising approaches. Still, this shift is slowly beginning to take place.

We are seeing this shift materialize in the form of integrated branding in content. Over the past 24 months, more and more advertisers have begun to work to integrate their brands and messages more directly into serialized Web shows, viral videos, educational videos, and other forms of entertainment. These campaigns have moved from untested experiments to real projects with production and distribution budgets that often top seven figures.

This is a great start, demonstrating an evolving relationship between brand and consumer that will continue to play out over the coming decade. What has not changed significantly, however, is the distribution mechanism associated with these new efforts. While brands are beginning to pour critical investments into production, they are still distributing the resulting content as if it were nothing more than a banner ad.

This has been understandable. In-banner placement of branded video does give the advertiser access to the reach, targeting, and measurability which they have grown accustomed to in display. And the length of these shows typically precludes pre-roll or other in-stream placements.

Unfortunately, in-banner placement defeats much of the purpose of branded entertainment as a consumer engagement tool. A video placed this way may momentarily grab the viewer's attention, but rarely will it result in a full viewing of the video or a positive impression of the brand's messaging. In-banner, the viewer expects to see a commercial, not a piece of content. Instead, the goal should be to draw the viewer into the narrative of a show to take full advantage of the content investment. A better solution to distribution is emerging.

This leads us to one of the first practices of a 'Cadillac' video advertising effort: editorial placement of the videos. Editorial placement involves working with publishers to position the videos as compelling content and setting the expectation of the consumer in the right place. Now, building a large engaged audience through in-page or editorial placement is difficult, but the resulting engagement with the consumer is far more meaningful. Rather than enduring your message to reach the content, the message is the content. Consumers who elect to watch these videos are far more likely to watch a significant portion of the video and come away with a positive attitude towards the brand sponsor.

The leads us to the second practice: guaranteed user engagement. User engagement can be viewed as an extension of placement, but great placement does not always guarantee engagement across every publisher. The only way to ensure engagement is to set financial incentives around authentic engagement rather than impressions. Viewers can be directed to watch these videos via thumbnails, RSS feeds and placement within relevant articles, but distribution partners should be compensated based upon the number of user-initiated (or Click2Play) views they deliver as defined by the Interactive Advertising Bureau.

The third practice, without which the first two are rendered irrelevant: seamless brand integration. Falling under the qualifier "you know it when you see it," brand integrations into long-form video should add to the value of the content (or at least not detract from it). When brands, agencies or their production companies don't execute effectively on the integration, publishers will be less inclined to carry the content, and consumers less inclined to watch it. Overbearing messaging, poor product placement and poor creative execution can all result in negative brand impressions and an implosion of value for the message and the audience.

What many brands might find most surprising is that online video campaigns that have been organized around these "Cadillac" principles are not only more impactful, but also less expensive than the same campaigns delivered in-banner and optimized around CTRs and eCPMs. Much like the emergence of social media and branded app campaigns, branded entertainment represents another movement from "paid media" to what Fred Wilson has termed "earned media," and its implementation should reflect this migration.

Here's where the "Cadillac" analogy can move beyond the cliché of simply being the "best" to being the "most valuable." So, rather than making the traditional media buy through a network, it might be time to begin evaluating new syndication models that appropriately value the content, deliver interested audiences, and charge based upon performance rather than impressions.

It's time to test-drive the Cadillac.

Clarification: Yesterday's Online Video Insider,"The Age Of Brand-Specific Data And The New Media Mix Model, initially misidentifed author Damon Bethel's company and title. He is executive vice president of strategic planning and business development at DBG.

10 comments about "The 'Cadillac' Of Online Video Advertising ".
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  1. Gordon Vasquez from RealTVfilms.com, February 24, 2010 at 3:11 p.m.

    Product Placement is the answer and you hit the nail on the head. Please take a look how we placed our sponsor "Buckaroo Jeans" into the interview with Aaron Carter before the Grammy Awards a few weeks ago.

    Thanks,
    Gordon@RealTVfilms.com
    Founder

  2. Richard Monihan, February 24, 2010 at 3:15 p.m.

    This is all great, and actually I welcome it.

    But from the standpoint of 2 parts of the industry, Kids and News, where does it leave us?

    Neither Kids OR News can integrate into their videos in an effective fashion, or they risk violating certain "rules of conduct" that exist. In some cases, these rules are explicit, such as CARU, but in other cases, they are implicit (who really wants to see a news report on the benefits of a particular BRAND of product? This would fall less into the realm of reporting and more into PR).

    If the future is simply integrated content and editorial, then these 2 industries are going to have to move back into media which is more sufficient in terms of providing them a reputable income.

    It's likely pre-roll and other "standard" methods of advertising will remain with us for some time to come primarily because they are VERY quantifiable, very easy to do, and scalable. Not to mention there are several industry segments that will only survive with these approaches to advertising.

  3. Paula Lynn from Who Else Unlimited, February 24, 2010 at 3:21 p.m.

    Not one size fits all. What a Cadillac is for one person is a Camaro is to another and you don't always know the difference.

  4. Mike Einstein from the Brothers Einstein, February 24, 2010 at 3:26 p.m.

    Alex,

    You're nibbling at the fringe of the solution. But in terms of product placement, the key is not to position the product within compelling video content, but rather to position compelling video content within the product's branded surroundings.

    In other words, bring the video (and viewer) to the advertiser, not the other way around.

    There is one, and only one scalable media model that understands this, and I'll be happy to share the details with anyone who contacts me here or calls me at 219-878-1006.

  5. Jonathan Mirow from BroadbandVideo, Inc., February 24, 2010 at 3:29 p.m.

    Dead on - I'm impressed. Now, drive that Cadillac down the road just a bit and you'll come up against what we're doing which is niche content shows where the viewers don't mind the advertising at all because it's stuff they're interested in! Harder to find advertisers (sad, but true) but affords the advertiser 100% audience engagement in their product instead of the old "change the channel" mentality.

  6. Mary Spio from Next Galaxy, February 24, 2010 at 3:32 p.m.

    Well said. We (www.Gen2Media.com ) have seen some truly impressive CTR’s with our branded destinations and expanding interactive video overlay units for clients such as Coca Cola, BMW, Fox TV (tune-in campaigns), Toyota Scion etc. Through branded content brands can drive real engagement and interactivity, and most importantly sales. In addition it expands on the notion of the 30 second and, since they can have channels of content as valuable information for their existing and future customers.

  7. Brad Michaelson from Brand Canyon at Runway 21 Studios, February 24, 2010 at 3:50 p.m.

    All of these options work to some degree or another and we don't discourage any of our clients from dabbling and experimenting because the formula for guaranteed success on the Internet has yet to be found. But more importantly, we feel that these are all interim steps backwards as we return to the days of the true "soap opera". When every URL is a broadcast channel and every company can cultivate its own viewers, companies now own their own networks. As video capture technologies keep improving and the term entertainment is redefined for the Web, companies can and should be producing their own, on-line shows that promote not only their industry but their products. Why place a product when you can brand your own show?

  8. The digital Hobo from TheDigitalHobo.com, February 24, 2010 at 4:48 p.m.

    Editorial placement of advertising content is not the answer. That only clouds the Church / State issues that struggling media companies are already compromising. There needs to be a clear demarcation of what is paid for and what is "pure editorial." And just like you claim people don't watch adver-content in an ad unit, they won't opt to watch it in the middle of the page either. Do you read the "Paid Advertisement" columns in the newspaper? yeah, me neither.

    Seamless brand integration is something that people have been struggling with in multiple media, and it doesn't change in web content production either. How do you secure an advertiser for niche content that hasn't been created yet? Small content creators dont have the ability to cut deals and get paid for using one type of car or soda or jeans at the moment. Certainly not at scale. And ad agencies are good at advertising, not script writing.

    Also, while users may not expect to see content distributed within a banner, they aren't forced to watch it there either. Its a commercial for itself as much as for the brand. However, most players in banners offer a full screen option, some even with HD. Users are invited to watch the full content on a branded landing page, or in a more traditional "content consumption" environment.

    I'm growing weary of people throwing around data in favor of an argument that it doesn't support. "YouTube said 70% of its users responded that they would rather not watch a video at all if it carried pre-roll." What does that tell me? That 70% of YouTube content is crap and not worth giving up anything in return. Ask if they'd rather pay for it? Suddenly those numbers change. What is content worth if users wont tolerate an ad or wont pay anything for it? Worthless. And how does that address the increasing amount of longer form, professional produced content being created and distributed on the web? Advertising is a fair exchange for watching TV on demand. Its not for watching another video of a guy getting kicked in the nuts.

    Lets stop talking about all video like it is of equal value. I don't see 70% of Hulu's audience abandoning content. There's life and video content worth watching outside of YouTube.

    Where, by the way, does your company distribute ads to? Sounds like AlphaBird is an ad network. From your site: " AlphaBird guarantees delivery of any video to any desired audience on any desired device for a fee." How come you aren't guaranteeing engagement like you suggest in the article? Guaranteed User Engagement? Have fun with that. You are suggesting a cost per Click or cost per Play model, and those already exist for the content syndication networks. (BBE & DBG have done quite well in creating branded content and distributing it across traditional video ad nets.)

    Lastly, your attribution of the "earned media" moniker is completely in error. From Wikipedia: "Earned media often refers specifically to publicity gained through editorial influence, whereas social media refers to publicity gained through grassroots action, particularly on the Internet." You're talking about buying and/or paying for the product placement. Don't confuse the "earned media" value for the CONTENT with earned media for the BRAND. The brand is "paid media" within earned media. There's a huge difference.

    I'll defer to Brian Morrissey's quote on the branded entertainment model: "There are one-off bits of ad content that can be consider branded entertainment, but I see little evidence brands will be able to create sustained media, at least through entertainment."

    I'm sorry to be so cranky about this, but my patience is wearing thin on this counter productive, self serving columns.

  9. Walter Sabo from SABO media, March 3, 2010 at 10:17 p.m.

    For over 2 years, HITVIEWS has placed some of the largest global brands inside videos created by enormously successful webstars. The audience is already in the seats. The crediblity is already established. The creative is up to the stars so it's right for their audience. It's not the Cadillac, it's been the Rolls Royce for over two years with happy clients. Please visit our website or call me directly for a full list of our successful campaigns. Walter Sabo, CEO, Hitviews.

  10. Pinaki Saha from Me!Box Media Inc., August 2, 2010 at 2:44 p.m.

    Hi Alex,

    Most of the answers that Cadillac is seeking or delivering may be in the offering of Me!Box.

    1. It's non-intrusive
    2. It's completely user opt-in
    3. It's curiosity driven engagement and in-play interactivity
    4. Call to action can be embedded at any point of the content
    5. And we provide full analytics of nearly 45 click points with time series - only one currently in the industry

    Feel free to test drive.. hope it interests you.

    http://www.meboxmedia.com

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