• by July 29, 2004

What are the prospects for streaming video online?

Do advertisers need prodding to try it? Are publishers being overly cautious in deploying it?

These were just a few of the questions raised this morning in opening remarks at the Jupiter Advertising Forum. According to JupiterResearch data on video and rich media, two-thirds of advertisers ran streaming video ads in the last year, most of those in a test mode.

The problem, said Nate Elliott, associate analyst at JupiterResearch, is a misperception that exists among advertisers that the audience for streaming video is too small: "The audience isn't the problem." Rather, Elliott contended, the problem is the inventory is too scarce and online publishers have created artificial limits on inventory. While MSN, ESPN, and Yahoo! have made news with their video products and services, Elliott maintained that there remains an "underwelming" amount of video advertising. He said they've been concerned about hitting consumers in the face with video ads. I have heard, however, that MSN is just weeks away from opening up MSN Video for general sales availability. MSN introduced its video service in January with a handful of inaugural advertisers.

Elliott also suggested that proprietary ad formats are making it harder to run video, and that premium content subscriptions (for pay subscriptions), can still carry advertising. He contended that just because consumers agree to pay for certain kinds of content, doesn't mean that they expect no ads.

Elliott also threw out a zinger--he maintained that most online agencies have no idea what to do with online video and that in order for the segment to fulfill its growth potential, offline agencies will have to spearhead the process for advertisers. I'm not sure I agree with that entirely. I do think savvy agencies are integrating offline and online media planning teams to deal with video at the headend. Starcom, according to Elliott, is an example of an agency that treats online video ads the same as offline ads. Any agency that hasn't begun integrating media teams is going to be late to the party.

Cross-media ad sales teams can also help spur the process as well. An example of the case for cross-media ad sales is MSNBC.com, MSNBC cable, and NBC News. Expect to see more emanating from this partnership in the near future where online video advertising is concerned.