ADOTAS EXCLUSIVE — The emergence of online video as a mainstream source of both news and entertainment has been a global phenomenon of immeasurable proportion. From industry pioneers such as YouTube, MySpace and Metacafe to more recently created platforms like HULU, Joost and Bit Torrent, Web surfers from around the world are flocking to online video portals at an unprecedented rate.
According to ABI research, over 1 billion people across the globe will regularly watch video content of some sort on the Internet by 2013. In the United States alone, Forrester Research has reported that video advertising will surpass $7 billion by 2012, constituting a 72% growth rate in the market. These numbers, while measuring different entities of the online video revolution, clearly support the notion of the global growth of online video that will be advantageous to both publishers and advertisers.
The global popularity of online video poses significant challenges to online video publishers: Serving video to international viewers is expensive and monetizing those views is often difficult. The problem stems from the fact that video consumption is global while ad buys are almost always local, either specific to one country or area. As a result, the video advertising market is extremely fragmented. Video ad dollars are spread over thousands of advertisers, ad agencies, and ad networks worldwide. Each is holding a small piece of the global video monetization puzzle.
Add to this fragmentation, the weak U.S. dollar and you have a real business challenge; money left on the table, or even worse, money wasted on serving videos that cannot be monetized. Now more than ever, publishers of all types and sizes are recognizing this challenge and trying to get a hold of the elusive international ad dollars (or should I say euros). With every challenge comes a great opportunity: those publishers who have been successful had these tips to offer:
• Go beyond the Pre-Roll: Even if pre-rolls ads are working for you in the U.S., they are not likely to provide a global solution. The production cost makes these ads too expensive for many advertisers in most countries, leading to shortage of pre-roll video ad inventory. Other ad units, such as overlays or banners, are easier to produce and are likely to increase your overall revenue.
• Partner for Scale: Find ad networks with wide international coverage or an ad optimization platform that works with many ad networks worldwide. Most ad networks focus on very limited number of countries or low monetization in international countries, leaving you with the video serving cost, but little or no monetization in other countries. By working with a global partner, ad coverage and monetization are simpler to attain.
• Tap into non-video ad formats: One creative way to solve the advertising shortage in video format ads is to leverage advertising inventories from text, display, and product ad networks. When done right, this solution provides good monetization, contextually relevant ads, and robust ad coverage.
Even though online video is at the forefront of today’s culture worldwide, it’s still an emerging market facing the complexities of new medium. As more viewers continue to flock to the Web from around the globe for video content and entertainment, publishers will continue to look for ways to satisfy demand and monetize their content in this fragmented market.