ADOTAS – As this year’s industry events cycle draws to a close, I’ve been reflecting on the recurring and all-too-familiar funeral rights that many have administered to pre-roll (or in-stream, if you will) as a viable ad format for monetizing video content.
For years I’ve listened to the debate (a duration of time long enough to validate pre-roll’s viability, no?) –- pre-roll annoys users, it isn’t scalable, it’s doesn’t exploit the promise of interactive, it’s not dynamic enough. Yet at each turn I have seen the innovators in our space step up and deliver more engaging user experiences and better mechanisms to facilitate scale.
This year ad agencies, web publishers, regulatory bodies and technology vendors made several notable advancements to the pre-roll format that should be recognized as further proof that the rumors of pre-roll’s eminent demise are greatly exaggerated.
Premium content publishers, like ABC and NBC, have had huge success enabling their premium full-episode player environments with custom, immersive advertising experiences that effectively monetize their content at a rate comparable with television. These successes have answered the bell and put to rest the conventional wisdom that pre-roll is dull, passive, and annoying to users — and the pre-roll ads are making publishers a hefty profit while benefiting marketers.
POOL is a great example of collaboration across the ecosystem to find new workhorse formats for pre-roll. This initiative, headed by Starcom (partnering with Vivaki) and large video content publishers and distributors, like AOL and MSN, leverages new interactive pre-roll formats (inspired by the networks and other innovators like Bright Cove, YouTube, and my own company, Unicast) to ascertain how video advertising can scale across multiple platforms while providing users more control and more engaging interactive ad experiences.
The IAB released VAST and VPAID standards, providing a framework to ensure interoperability between video platforms and ad servers. There is a robust adoption program in full voice and major publishers are committing to compliance this year and next. The bottlenecks lamented by many on the buy-side — fragmented and inefficient workflow, lack of standard publisher specs, ad hoc and inconsistent reporting — could make way for a new liquid video landscape where buyers can begin to leverage the economies of scale required for video advertising to make faster and more substantive inroads into television budgets.
Together, these three achievements in pre-roll advertising represent a compelling synergy of highly coordinated innovation, investment, and industry standards that make me very bullish about the future of video advertising.
Another contributing factor to pre-roll’s continued success is the growing broadband penetration and the improving technology platform for video delivery. Both factors make the end user experience much better for consuming video online, and has led to wholesale improvements in the amount of long-form video that now is available. Long-form video is a special key to success as it allows publishers to build a TV advertising model around their content that, if done correctly, can leverage the interactive qualities of the web (i.e., Flash, etc.).
Creative agencies are also more involved with producing video content specifically for the web medium. This effort — though not totally successful yet — challenges the old conventional wisdom that 15- and 30-second TV spots simply should be re-purposed to the web. That’s boring and doesn’t deliver on the promise of the web. While original content produced solely for the web might not rise from a niche pursuit, the middle ground is probably a combination of re-purposed video within an interactive framework akin to our full-episode products. One remaining challenge, though, is short-form video. In many cases this is paired with advertorial pre-roll of the same duration or even longer, which obviously frustrates consumers.
Other online video hurdles also exist — a recognized lack of premium video inventory, a flawed and inefficient selling model that depresses prices for content as it syndicates across competing sites, and the vexing question of how to monetize popular, but seemingly unsellable user-generated-content video, just to name a few.
But just like pre-roll was pronounced dead at all of the video conferences in 2008 and early 2009, only to see Vivaki, ABC, and the IAB enable pre-roll’s re-invigoration, new tools and insights are setting the stage for next year’s continued progress towards the type of monetization (and increased TV budgets) that only better scale and user experience can bring.
For example, look for formats that enable consumers to select the advertorial content they wish to see instead of being fed the same 30 second spot again and again. Expect to see dynamically enhanced video formats that improve relevance as well as formats using engaging 3D navigational elements and effects. In terms of pricing, I expect to see evolving models around consumer engagement, view durations, and even conversions — but most notably, I will look for a far better monetization of premium content throughout its distribution channels via better-structured syndication deals.
When we launched our first pre-roll product in 2003 at Unicast, we had confidence – along with everyone else contributing to the video market at that time – that we would see a critical mass of publishers and advertisers propel pre-roll and video advertising into the top echelon of online advertising formats. While that has not yet happened, pre-roll lives and is well on its way to taking its promised place in online media spends.