2011 was a breakout year for online video. It grew in both importance and prevalence largely because of the abundance of video content coming online from video streaming sites like Amazon, Hulu, Netflix and VEVO -- and the fact that the quality and quantity of content has dramatically improved in just a short time.
Another factor: Cable channels like HBO and ESPN and providers like Comcast putting more shows online, enabling advertisers to both replicate and improve on their TV advertising efforts. Users, meanwhile, are making it clear they will sign up and pay to watch video not only online, but also via mobile devices, such as smartphones, the iPad and other tablets.
So, how will online video evolve further in 2012? Here’s a glimpse:
Rise of multiscreen TV advertising: In 2012, expect TV advertisers to embrace an integrated, multiscreen approach to advertising. The traditional TV campaign will be extended to reach audiences across every channel: mobile, online and eventually, through connected TV devices and other cable set-top boxes. This means the somewhat unnatural divide between TV and digital advertising buys will go away and advertisers will have the opportunity for a single “digital TV” ad buy. In fact, it’s already happening. Look at Roku: Disney has started selling interactive ads on its Roku channel. So this transition is not as far away as some may think.
Fade-out of the “dumb” pre-roll: The annoying TV commercial turned pre-roll will be replaced by highly interactive and social in-stream video ads designed to engage and entertain users. The consumer of 2012 will expect value-added interactions across any screen, anytime, anywhere. (Thank highly interactive smartphones, tablets and social media for this shift in expectations). Users don’t want ust to sit and watch an annoying 30-second pre-roll ad for a car while waiting to view their favorite TV show online or on a tablet. They want to get value from that ad. They want to feel the experience of the car, learn about it, possibly find their local dealer and tell their friends about it.
Proliferation of Companion TV/Social TV apps: Traditional TV provides no real way for users to interact with content, so expect to see a wave of iPad and tablet apps hit the market that essentially extend the TV content and advertising experience. Users can interact with TV programming and other content, and have contextually relevant ads delivered on their tablet while they’re watching TV.
For example, say you’re watching "Glee" on TV and there’s a TV ad for Skechers. The Companion/Social TV app would detect that you’re watching "Glee" and show you an interactive version of the Skechers ad that will allow you to see additional videos of the shoes, download a coupon, find the nearest store that carries them, and tell your friends you’re going shoe shopping.
Broad adoption of video advertising models: All video streaming sites (yes, even Netflix) will adopt video advertising models in an effort to keep subscription prices down as premium content prices skyrocket. Subscription-only (and ad-free) video streaming will be very expensive and probably not sustainable as a business model -- except for video content owners like cable and broadcast channels. Outside of Hulu and VEVO, several new entrants to video streaming are trying to go the subscription-only route. But video streaming sites that think they can live on subscriptions alone likely will have a hard time surviving. For sites like Netflix that have a goldmine of premium content, switching to an ad-supported subscription service makes sense. It will instantly create a multiscreen integrated “digital TV” ad buy that helps advertisers reach viewers on PC, mobile and Connected TV.
In 2012, the online video experience is only going to get better for users: Higher-quality content, more viewing options that are convenient and affordable, and more ways to interact with content that provides value. And for advertisers, there will be new opportunities to connect with users across a broad range of channels and extend the TV experience in ways never before possible.