• by Naomi , Chris Young , August 5, 2005

When the New Year dawned, more than half of U.S. homes were connected to the Internet via broadband. But it wasn't until July when AOL attracted a higher audience to its coverage of Live 8 (5 million) than did cable TV or satellite radio, that much of the traditional media woke up to the possibility that online video might just be the real deal.

Much of the recent buzz has surrounded the dramatic increase in video content, but unless that content is going behind a pay-per-view firewall, you can expect video advertising to pay the freight as users continue to increase the time they sit in front of their computers rather than their TVs.

A number of industry categories such as movies, video games, and music have used online video very effectively for some time now. Hey, what's more fun than watching the trailer for the next blockbuster film? More and more other categories are moving in the direction of online video with good effect: automotive, travel, CPG, even book publishing. As the shift away from network TV toward online spending accelerates, advertisers are going to bump into a major road block: scale.

The online video industry has grown up (as have many parts of the online business thanks to competitive pressures) in a patchwork of different offerings. There are nearly a dozen media players (and even the biggest doesn't reach half the online audience) and more codexes than you can shake a stick at. What this means is that an advertiser seeking audience scale has to send 10 beta tapes to 10 Web sites and have each encoded in different player formats. If only it were that simple. Attendant to this process are dozens if not hundreds of e-mails and calls to insure that what the client expects to see on the LCD screen gets there and shows up in a place and manner that makes him/her happy.

Think of what we are asking the client or agency executive. We ask them to wrestle 10 different animals to the ground just so that a critical mass of users see the ad, and in a medium that is not nearly as familiar to them as TV or magazines. "Let's see, I can spend $25 million in a single phone call to CBS or in 500 calls to a dozen or so Web properties each of which will handle my video a little differently. Think I'll go with the default mode."

Here's an idea: Instead of making it harder to spend money online, let's make it easier! What I'm talking about is a universal in-stream solution so that clients need only encode their existing (or new) video once and it can play anywhere on the net. Why in stream? Because as Deep Focus CEO Ian Shafer wrote recently on MediaPost:

"In-stream video ads are often what all the excitement's about. They typically run before (pre-roll) or after (post-roll) a requested video online. You might want an in-stream ad if you want to run a standard 15-second or 30-second TV spot. If you're only concerned with increasing the frequency of a broadcast-style ad, this is the place to be at a minimum."

In stream is a perfect marriage of content and advertising. Users seem to like it and it performs better than other video units. In our experience, in-stream units generate a 20 percent lift in percentage of video viewed (84% vs 70%) and a similar percentage lift in time spent with the unit.

Now that we have built a track record of successfully attracting audiences to advertiser's online video messages, it is time we take the pain out of the process so that the new categories just coming to streaming video will not hit the default spending mode.