Commentary

Ask The Experts: The Future Of Online Video Advertising

With 2008 approaching and the WGA writers' strike continuing to weigh heavily on advertisers' minds, SpotXchange CEO Michael Shehan sat down with Denuo Group, Publicis' Senior Vice President Tim Hanlon to discuss the future of video -- on and offline.

Michael Shehan (MS): What needs to happen for media planners/buyers to increase interest and usage in online video advertising?

Tim Hanlon (TH): It may not be things that are directly controllable by the purveyors of video or the agencies. It may be just bigger pieces finally coming together. First is the evolution of thinking, from "TV buyers" into more video buyers. Increasingly, television people are starting to recognize that it's not just about linear television and 30- or 15-second ads. Increasingly, even from the TV side of things people are watching programming in a pronounced way in on-demand settings, and certainly in digital video recording or time-shifted environments, like Time Warner Cable's Start Over. The mass marketization of time-shifted television viewing is finally upon us and it is begrudgingly dragging a bunch of TV experts and buyers into this idea that it's not just about 8 p.m./7 p.m. central. Add to that a slow but steady growth in broadband or online video availability, especially of a quality nature.

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There is no television network under the sun that isn't aggressively trying to roll out broadband video extensions of their programming and/or additions to their programs with advertising availability. There is no shortage of other content providers, whether they be long tail bloggers or newspapers, magazines and others that have content but have not historically fancied themselves as video creators or providers -- examples include The New York Times, The Wall Street Journal and Barron's.

Another layer is this writers' strike. You could argue that people will start to be less interested in prime-time network or dramatic or comedy shows that are in repeats. They might not only look for live programming like sports and news to fill the gap, but they might look elsewhere than the TV set to consume video.

MS: What opportunities do you see coming up for online video?

TH: I see archival material as a big opportunity. It's not just about today's programming and the repurposing of said programming or originating new programming. It's literally opening the doors to a treasure trove of archival materials like classical shows. This makes video search an element. Companies like Truevo and Blinkx are trying to figure out how people can find video online. Video search is going to be a huge opportunity to unlock archival material. If you look at all these concentric circles, [they] point to more video for more people, meaning more advertising opportunities -- certainly not less.

MS: I agree, a lot of the adoption lag has been due to less than desirable inventory to sponsor. What do you think of the adoption rate by media buyers? Is it too slow? Should they be more aggressive -- or do you think it's all right to see how things evolve before jumping in?

TH: I think it's difficult to stall now. It's hard to ignore the realities of the recent evolution of online video consumption. Look at hit programs like 'Grey's Anatomy.' There is a significant amount of viewing occurring in broadband or online video environments as well as time-shifted and VOD environments. If I am a television buyer, I need to be fully cognizant, aware and honest with myself about the percentage of people who are no longer watching TV by time and date. In some cases those percentages can be greater in the aggregate than the original airing of the show.

Broadband video is clearly the easiest way to catch up or watch a show after the fact. Since you don't need a box, you also don't need a certain provider. Again, there is clearly a large amount of people who do have a DVR or a VOD available to them and use it. But there are far more people who have an online connection -- broadband at that -- that enables them to pop in. Ad support is clearly the way that it gets monetized. We're in this evolution to where aggregate audiences are what will be valued. Advertisers and their agencies need to be smart enough to be available and around all those environments and test points.

If ABC is selling ad sponsorship of 'Grey's Anatomy,' I as a media buyer need to make sure my ad messaging is available in every outlet that 'Grey's Anatomy' is offered to support advertising. The types of advertising that surround the said program may differ. The online video expression offered on ABC.com has a different avail structure and different lengths than, say, the VOD offering on FOX Cable or a possible reinserted video ad environment on a DVR or a mobile showing. But advertisers and their agencies need to think holistically about the entire touch point portfolio of a video program.

Next up: a discussion of video ad networks, exchanges, auctions, pricing and video ad units.

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