Commentary

In On-Demand World, It's Time For On-Demand Video Advertising

It’s not just a millennial thing anymore. Media users of all ages are accustomed to hit a button and make a choice about when and where they will consume their next bite of media. Whether a YouTube snack or a full, multi-course, Netflix meal, it is the empowering moment of activation that feeds and satisfies the consumer’s hunger for media, as no traditional serving of “appointment” television ever has.

But why must those darn, interrupting video commercials nearly ruin the whole experience? So says an April 2016 Accenture study, as reported by eMarketer. In most global regions, 80% or more of Internet users surveyed agree or strongly agree that “Advertising interruptions while reading text or watching videos are too frequent.” Also, 38% to 55% of users agree or strongly agree that “in the next 12 months I am planning to pay for new solutions to remove advertising interruptions (e.g. paid subscriptions) while reading text or watching videos.”

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It’s time to move video advertising out of the middle of the content stream, and right to the front of the interactive content activation experience.  It’s time to put the viewing of advertising in the hands of the user, just as we’ve done for content. It’s time for a gateway unit that commands high CPMs from brand advertisers, is fully viewed and listened to through consumer activation, and allows users to opt out of in-stream interruptions by opting in to an advertiser message.

The upfront trading of consumer attention for content access — as an alternative to pay-per-view (PPV) or the overload of interruptive ads — is the next logical evolution of the ad-supported T/V (television/video) business model.

Requirements
1. A lead-in screen that offers the consumer three interactive choices to access content:
-- Micropayment (PPV)
-- Regular commercials pre- and mid-roll
-- A “one and done” commercial option, where a viewer selects one of three ad “avenues.”
2. Ad-tech platforms and software that manage multiple functions of digital ad delivery, content delivery, transactions, tracking/reporting and billing

Benefits

Advertisers
Buyers are assured of viewability, audibility and accountability up to the level of completed ad views, adding major value to each ad impression.

Since viewers are presented with a “menu” of commercials, choosing one identifies their purchase interest and stage, adding even more value to the gateway ads.

As the on-demand ad data is captured, it allows buyers and sellers to refine targeting and further increase the value for both consumer and advertiser.

Content Providers
Brand advertisers are paying a much higher CPM for this high value, fully completed sight, sound, motion message delivery, allowing content providers to reduce ad clutter and maintain /increase profitability.

Video Content Consumers: Viewers are willing participants, not the aggrieved/annoyed targets of forced “search and destroy” advertising strategies.

Still, without the multitude of interrupting commercials that advertisers pay for now on an opportunity-to-expose basis, wouldn’t total revenues take a beating?

I believe not. No business ever succeeded by rigidly holding onto a worse customer experience when technology brought new and better options (see cell phones vs. land lines for a fairly recent example). And buyers who are CPM “hardliners” will still have plenty of online and long-tail interruptive TV inventory to buy at a discount, further filling the coffers of providers. Finally, the value of each ad message and related behavioral data will rise so significantly, that revenues may well increase in the end.

Positioning this new approach to consumers would be exciting and fun. Imagine as a consumer being offered a “view-per-view (VPV)” or “one and done” option, with the key benefit being one ad or ad pod of reasonable length and no further interruptions to content.

I dedicate this article to Dana Jones, who founded Ultramercial (a former client of mine), and conceived the idea of making the implicit ad contract explicit.

5 comments about "In On-Demand World, It's Time For On-Demand Video Advertising".
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  1. Ed Papazian from Media Dynamics Inc, August 31, 2016 at 10:15 a.m.

    The real question would be how many digital video viewers, who claim to be so upset by commercial interruptions, would opt in to a single commercial via on- demand viewing? If that number is around 2% then, no matter what the outcome sales response-wise the overall effect would be minimal and very few advertisers would participate, preferring to force their attentions upon viewers the old fashioned way. If, on the other hand, 50% of the average digital video's audience chose to watch the average ad, even at a premium CPM---like $100-----or ten times the TV norm---it's possible that this might pay out for some advertisers. The only way to find out is not by conducting BS viewer opinion surveys that beg the question but, instead, for a major digital video ad seller to try it out and report, honestly, on the findings. I seriously doubt that the results will be favorable---though here and there we might see an exception. But, instead of guessing, just about any rational advertiser will want to see the concept tested. How about it YouTube?

  2. John Osborn from TV-TheNextGeneration, August 31, 2016 at 3:07 p.m.

    Thanks Ed Papazian for your comments. The idea is to employ this "gateway" approach like newpapers employ soft or hard paywalls, except that to access video content, there would be an on-demand advertising "viewing key" to open the paywall for each piece of content. A YouTube clip might have a :15 second ad, a 15 minute video perhaps 30 seconds. A half hour might ask for a :30 or :45, while an hour of TV content might be a :60. Full length feature film length content could command 1:30 (all examples).

    I totally agree that this is a testable proposition, and deserves a market test on some video content provider that currently runs video ads in pre-roll and mid-roll positions.

  3. Ed Papazian from Media Dynamics Inc, August 31, 2016 at 3:28 p.m.

    John, why so formal----just Ed will do.

  4. George Simpson from George H. Simpson Communications, August 31, 2016 at 5:16 p.m.

    I select "one long one and done" option - then hit mute and go back to Facebook on my phone until the real programming starts. What then?

  5. John Osborn from TV-TheNextGeneration, January 27, 2017 at 1:57 p.m.

    Good question. What if the ad was interactive, and agreed to by the media consumer as a fair exchange for content? That way the cost to the consumer is engaged advertising, with access to content and no more interruptions thereafter. As a former buyer, I would pay a significant premium for proven engagement that the consumer agrees to.

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