Commentary

Despite Need For Standards, Online Video Is Looking Bright -- And On A Roll

Standards. They are still the one of the biggest hurdles advertisers and publishers face in the online video business.

Standards have plagued online video since its infancy and remain an ongoing challenge, according to a new report released by ad network Brightroll.

When it comes to online video, brands want to know what they’re buying, but they also want to be able to compare results to other campaigns, and they want to be able to deliver creative that works easily across multiple formats and sites.

While agencies and marketers may kvetch about standards though, the business is still experiencing skyrocketing growth. Many online publishers are expecting CPMs to rise, to the tune of a 15% bump in the fourth quarter, the Brightroll study found. That’s a healthy sign that online video advertising continues to be a vital part of the new media ad ecosystem. In-stream video, such as pre-rolls, are the most popular formats amongst marketers.

These findings jibe with eMarketer’s overall barometer of the health of online video. The research firm has said spending on online video advertising will rise 52% this year, to hit $2.16 billion.

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The prevalence of online video ad networks and exchanges is boosting that growth. Nearly three-quarters of online publishers are selling about 20% or more of their ad space through ad networks, representing a two-thirds increase over last year, Brightroll found in its second annual survey assessing the use of ad networks and exchanges across more than 100 premium online publishers.

Interestingly, most sites use at least three or more ad networks, underscoring the important role ad networks do play in a publisher’s ad sales plans, Brightroll said. Sites use ad networks to boost overall revenue, sell off remnant inventory, and improve their fill rates, the report said.

But the adoption rate of ad exchanges is much lower, according to the ad network’s survey. While about three-quarters of publishers said they use exchanges, most use them use them very little. About half of respondents said they sell 5% or less of their space through exchanges.

Like everyone else, publishers are keen on the mobile opportunity. They recognize the huge growth in smartphone usage, but more than two-thirds of publishers said 5% or less of their inventory is mobile. This may hamper the growth of mobile video advertising, as well as the further expansion of online video buys to also include mobile.

Publishers say technical integration remains a hurdle for mobile, as well as standardization. I say if we can get Apollo 13 back safely from the moon, technology should never be the hurdle.

1 comment about "Despite Need For Standards, Online Video Is Looking Bright -- And On A Roll".
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  1. Jeff Smith from Nielsen, October 28, 2011 at 4:32 p.m.

    A lack of standards is definitely a key hurdle facing the continued growth of online video. Regarding standards as they relate to the measurement of the ROI associated with video, my company has recently embarked on an effort to provide the industry with the ability to measure and optimize Brand Lift generated by video advertising in real-time, wherever and however the video is delivered. This includes support of VAST/VPAID, as well as integrations into the leading custom players used to deliver video online.

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