Commentary

Preparing for the Shift: 2012 Pivotal Year for Video Advertising Ecosystem

When thinking about the future of media from my corner of the world-addressable video advertising and all its expanding manifestations-everyone agrees on its long-term future: growth will be astronomical. If there is one debate, however, it is about the speed with which this growth will come.

Three major constituencies will shape this growth trajectory: advertisers, publishers, and the ad tech players themselves. The upcoming year will force the hand of all three.

2012 represents the perfect storm of opportunity for the addressable video marketplace.

The Summer Olympics will coincide with what is likely to be the highest spending presidential and congressional political year that our country has ever seen. Regardless of what happens with the economy, spending around these events will be strong: major brand advertisers will not forego the Olympics, and political advertisers have one shot to sell their candidates. As a result, traditional television will have extreme demands on its inventory and brand advertisers will need to find new supply alternatives to meet their marketing goals.

Video is a logical place to look. Currently, most major advertisers are leveraging online video advertising, but not to its full capability-testing the waters, but not jumping in. 2012 could change all that. Next year could be the tipping point for online video-if we're ready. Enter the other two players in the growth equation.

To fully capitalize on the opportunity ahead, two things must happen. First, publishers must begin to look beyond increasing CPMs to monetizing inventory. Publishers can best show their value-and subsequently increase revenue-by focusing on developing extensions for advertisers to reach consumers that go beyond the scope of traditional television advertising.

And second, the ad tech providers within the space must be ready to take a stand and define who they really are and what it is that they really do. As demand increases and the industry matures, it will no longer be possible to be all things to all people. Sure, land grabs are tempting, but it's time for the players in the ad tech space to pick a core competency, declare it, then set about doing it better than anyone else in the market. By taking away some of the confusion within the space, all parties will be better served, and that projected growth will likely come sooner rather than later.

Scott Ferber, Chairman and CEO, TidalTV

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