Commentary

Digital Video Advertising Based On User Control Paves Way For Growth

Consumers are increasingly controlling their media experiences; currently, 25 million households in the U.S. have a DVR, and that number is expected to increase to 40 million by 2011, according to Magna Global. Technology -- including the Internet, the DVR, satellite radio, even the remote control -- has forever changed consumers from passive media viewers to active content controllers in just a short period of time. Online, consumers are even less passive; using search engines to find information, email to manage subscriptions, RSS readers to deliver relevant content when they want it, and pop-up blockers to stop advertisements from annoying them.

In the wake of this rapid change, particularly in the hyper-consumer-controlled Internet medium, publishers and advertisers must realize that this trend is here to stay. In fact, their future success rests on their ability to offer solutions that provide both relevance and control to Internet users if they are to gain new customers, strengthen existing relationships -- and ultimately survive in this new media marketplace.

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It seems unlikely that traditional models established for offline media will endure online. We know the landscape is changing. We are part of it. If consumers have changed the way they interact with media, why is it that today's new media marketplace differs only slightly from its offline counterparts? Web pages resemble print pages in magazines. Pre-roll, mid-roll and post-roll digital video advertisements resemble television's ad formats. Yet Internet advertising -- with its ability to engage the user, provide metrics to the advertiser, and flexibility for publishers -- has the potential to be something much more exciting to marketers, publishers, and users than any media before it.

While it seems that digital video will become a vital part of Internet media, there is little reason why digital video advertising needs to resemble traditional models on television or other media. Historically, the most successful online advertising models have been designed specifically for the non-passive Internet media consumes - like search and in-text advertising -- because they offer solutions by providing relevance and the ability for consumers to control their media experience. We witnessed Google skyrocket to success in the online advertising market based on a model that focuses on providing consumer control and relevance. Google's paid search programs, Adwords and AdSense, account for almost 99% of its revenue. Similarly, in-text advertising is both user-controlled and relevant. Words are highlighted within Web content, acting as triggers for user-initiated advertising.

In the U.S., the Interactive Advertising Bureau (IAB) recently provided an overview of the evolving online video advertising landscape, citing in-text as one of three ways to deliver video advertising online. As the IAB has outlined, in-text has become a notable part of the video advertising landscape.

Why? In-text video advertising offers Internet users the ability to interact with advertisements on their own terms by providing a user-initiated format that matches ads to relevant words and phrases within content. For advertisers, in-text provides virtually infinite inventory with CPC-based cost-efficiencies, while providing publishers the opportunity to monetize their vast amount of online content via premium video advertising with minimal risk. In-text charges the advertiser only after the consumer has engaged and becomes interested in the brand. In-text has ignited an online brand revolution.

Technology and the Internet have changed the way consumers gather information, do business, shop, travel, and to an even larger extent, communicate with one another. The Internet has changed the way we think about these activities -- and we need to think differently about how we advertise on the Internet. We need to continue pushing forward and discovering not just what might work, but what increases efficiencies, dissolves information barriers, and improves our lives -- which is ultimately the promise of our medium.

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