Commentary

It's Experience, Not Ad Format, That Brings High CPMs

A few months ago, in its "Interactive Marketing Forecast 2007-2012," Forrester reported that a staggering 82% of consumers find pre-roll, in-player and in-stream video "annoying." In the next sentence of the report, video overlays are hailed as generating five to 10 times more clicks than banner ads.

A month later, AOL and PointRoll were credited by the trade press for their innovation in "developing the video ticker ad platform," but just as quickly dismissed by eWeek as "the latest alternative to pre-roll and overlaying ads that tick off users." One day, YouTube's use of so-called "lower third" ads is predicted to become industry status quo; the next day the blogs are calling these ads intrusive, unintuitive and stale. And the most recent contradicting report from Tremor Media shows, "Pre-roll is still hot... Twenty-seven percent of all video ad spend is in pre-roll, and we don't see that ratio moving dramatically to overlay technology or other alternatives."

What's a Web publisher to do when consumer behaviors indicate pre-rolls, overlays and other new ad formats are not producing the desired and promised CPMs, and it's still unclear what will achieve mass appeal? Many publishers have been led to believe they must deploy engineering resources to execute complex and expensive technology updates -- such as building custom applications for advertisers and modifying player technologies -- in order to deliver whatever new fly-by-night ad formats and styles of avails Madison Avenue has developed to entice their advertisers and consumers. This process is costly, time-consuming and does not guarantee results.

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I believe it's not about gazing into a crystal ball to predict what ad format will produce the greatest CPMs. In an industry as exciting, creative and fast-moving as ours, it seems we are all becoming as distracted as the consumers we are trying to attract. But we need to remember the basic premise that advertising is communication of valuable information. And for it to be effective, we need to communicate the message multiple times in multiple ways; we especially need to recognize that every time the message needs to be a fresh exciting experience that engages and resonates with target customers, motivating them to take action. David Ogilvy once said, "What really convinces consumers to buy or not to buy is the content of your advertising, not its form."

I'll take Ogilvy's statement one step further and say this: Successful advertising in online video means combining the right ad avails, with the right experiences, at the right points in time. The winners will be publishers who recognize this will lead to returns for their advertisers -- and while the ad format is key to maintaining high consumer engagement levels, the "newness" shelf life of information and formats is miniscule. They must be able to change ad units and ad formats fast.

Working this quickly requires partnering with a technology provider who works with them to remove engineering obstacles -- such as separating engineering from ad sales so new advertising vehicles can be rapidly deployed outside of the engineering development cycle. Also, giving publishers the control to sell advertising against their video no matter where the content is being distributed across Internet sites and video platforms.

The revolution in video distribution and consumption is challenging networks, publishers and advertisers to find new monetization models. The ability to create, deploy, change, and incorporate any existing or new advertising format across all major video distribution points in minutes is the requirement to ensure engaging, effective and valuable advertising for a winning monetization strategy and advertiser offering.

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