• by Steve Robinson , March 3, 2008

For more than a year, analysts have predicted exponential growth in video advertising revenue. The media have hyped new ad formats as having the potential to change -- dramatically and positively -- how consumers interact with dynamic new video ads. Many new video players have mushroomed, touting "video advertising" revenue models to a sea of hungry VCs that are anxiously providing them with big bucks. But video publishers are challenged by the many consumption points and the slew of new ad formats for the multitude of emerging players.

As CEO of a technology company, I am an unlikely person to point to technology as a problem. Yet I believe that the same technology that caused the explosion in video on the Web and digital video distribution has become the obstacle for the ecosystem of networks, publishers and advertisers who must deliver on its promise. This ecosystem believes tremendous opportunities in new industry segments will emerge for them to implement dynamic new technologies that deliver targeted, relevant and engaging ad formats.

But for every industry pundit predicting exponential growth in ad revenue, I have two customers telling me they're at a standstill in delivering new video ads because of proprietary technology limitations. Multiple players and various ad formats means many integration technologies, which adds complexity!

In the Yankee Group's report, "The Medium is the Message: Challenges for Online Video Advertising," Anette Schaefer states that a major challenge to the industry is "the creation and planning of advertising campaigns [that] need to be customized or adjusted for each video platform, thus increasing development costs." What this means, from a technical standpoint, is that every player technology requires its own unique solution for ad delivery and integration. Anytime an advertiser desires to change the ad experience, the engineering department needs to get involved. This is a step in the wrong direction because it increases the cost and time needed to make changes.

From my vantage, it appears that for a number of reasons the lion's share of the industry's energy and effort have been placed on creating media planning strategies that "combine the value of the Internet with the emotion of TV [Yankee Group]." While I do not dispute the importance of this step in the process, I would argue that the technology plan is of equal significance.

The best media strategy will fall short unless measures are taken to ensure that Web, television, IPTV and other emerging technologies are able dynamically to accept and understand how to display an ad or series of ads. Build in the need for measurement, and technology becomes even more paramount -- but we'll save that discussion for another time.

In order to overcome the technology obstacle, it will be important for the media ecosystem to define standards, allow for emerging formats, and adopt ad delivery standards that can define where, when and how media elements display in a video and can be labeled for a single video, multiple videos, and/or across multiple video platforms (players). When that door is opened, significant monetization of video advertising will become reality and online advertising inventory will finally take hold.