• by Mike Cassidy , November 19, 2007

As we approach the end of the year, I have been thinking more about the status of online video and what, if any, progress we have made this year. When reading through old MediaPost video articles and blogs, you'll notice lots of complaints on why video isn't so compelling -- with some suggestions sprinkled in, which typically tend to be for companies looking to push their own products. Despite these efforts, the same issues and pain points with video remain. So, for this piece I am focusing on both the supply and demand of online video, because the perception in the marketplace, in my mind, has quite an impact on execution.

From publishers and advertisers I regularly hear different and conflicting opinions on whether or not enough video inventory exists. One agency will say there is plenty, while another tells me most publishers are sold out. So which is it? Let me share some thoughts from both sides of the equation.

For sellers, I am seeing different strategies in place, including some providers selling through their entire inventory at the best price possible, much as they would display, while other publishers are much more limiting and less flexible. The media and trades have so greatly hyped up video, that certain publishers refuse to sell below their incredibly high target CPMs. Advertisers are often quoted saying how much they love video and how they believe video is the future, but too many of those same advertisers are not backing that up with their spends. Publishers hoping to move every video impression at a $50 CPM are ultimately going to realize they need to be more flexible. Publishers also need to upgrade their technology compliancy to accommodate a wider variety of ad serving platforms. Demand becomes irrelevant if you can't actually deploy.

On the buy side, I am still surprised at how few RFPs have a video component to them, and how many are ultimately pulled before ever being executed. Behavioral and contextual targeting continues to be the dominating item in RFPs, although I expect we will see an uptick in video going into the new year. Agencies give very mixed messages on whether online video is in sufficient supply or not, which undoubtedly must play a little bit into their psyche come planning time. If the inventory seems difficult to secure and deliver, then why bother?

As 2008 approaches, we will soon learn if this year will be remembered as the time when online video really took off and helped drive the interactive marketplace -- or the time that online video stumbled and did not live up to the expectation. I personally am optimistic, but the outcome relies on how publishers approach their inventory and how advertisers secure it.