Video Ads: Fulcrum for a New Ecosystem?


fulcrum_smallADOTAS – 2010 is the year online publishing needs to decide what it wants to be when “it’s all growns up” (to borrow Vince Vaughn’s grammatically-incorrect but memorable line in “Swingers”).

If online publishing (and more specifically, digital advertising) is ever going to be a material part of a media company’s revenues, fundamental changes in publisher execution, advertising creative and user expectation need to occur. While online advertising has proven that it can deliver as a direct response medium, it has failed to prove scalable, top-of-the-purchase-funnel success that will grease a material shift of brand dollars online.

Here’s why: There are at least three components that make every brand-advertising ecosystem (TV, radio, print) effective. First, the ad currency. For online content sites, the ad currency of record (display) is being used not to drive brand awareness or purchase intent, but for its ability to generate a click… something it only does successfully an abysmal 0.1% of the time.

Second, perhaps because of this failure, online publishers have cluttered their pages with a hodgepodge of ever-increasingly annoying and unseemly ads. The really standout ad executions (think: Apple’s takeover of the home page) are completely unscalable both for publishers and advertisers. A single campaign can literally take months to execute, between developing the ad creative and deploying on sites (which typically requires site template changes and dozens of signoffs).

Third, users don’t know what to expect with respect to online advertising (every day’s a box of chocolate), but they currently believe high-quality content should be free and their ads non-intrusive.

Add it all together and you see why this ecosystem is in need of repair if it ever hopes to be something other than a direct-response medium. Which is fine and dandy on its face, but let’s be clear: You could have never built (and now cannot sustain) The New York Times on classified ads that are only paid for when someone calls (0.1% of the time). The math doesn’t work.

By contrast, television’s ecosystem has a 50-year track record of providing something advertisers want, something viewers understand and accept, and something broadcasters can deliver — an audience plus a completely standardized and scalable ad currency that can be trafficked across cable, satellite, broadcast and local. In TV, a 30 is a 30 is a 30.

So, then, what about video in online advertising? Can it be the fulcrum of a new online ecosystem that changes digital advertising? Yes and maybe.

Yes, because like television, commercial spots effectively deliver brand messaging, and the same creative can be used across sites and even platforms. But it suffers from a material flaw — there is not enough of it.

The vast majority of content consumption (over 90%) on the web is not of video content that affords the option of trafficking pre-roll. Rather, users are doing email, checking weather, reading news articles, searching for new recipes, etc. So even if online video views grow 50% a year, it will be dozens of years before online video even offers the opportunity to generate the type of revenue TV generates today. TV does more than 32 spots an hour, while online may do only a few pre-rolls per user/day.

One solution is to develop a platform that brings the best of the TV ad model — its ad creative and scalability — to the web, with all of the accountability of digital media. Here’s the catch – we’re talking about using that platform for all content, not just video content.

Reading The Wall Street Journal online could thus require you to watch a 15-second ad — one that elegantly opens up full screen and requires a user’s full attention, just like a TV commercial pod. Over time, ad frequency could increase to one ad per hour or browser session.

Before the crowd boos, considers this: creative and engaging video ads with sound and motion actually create a better user experience than banners, rich media or interstitials. I realize consumers say they don’t want any interruptions, but when the alternative is a paywall, this ecosystem looks a little more appealing.

And while we applaud Rupert Murdoch’s desire to create a sustainable online businesses with subscription, we believe he would be equally well served by deploying a platform that could extend his current TV advertisers’ campiagns online.

It’s time to condition people to uniformly trade off watching a commercial for getting free professional content. It’s time for media companies to focus on what they like to do and do best.

And it’s time for marketers to have an ability to deliver a true branding experience online that garners the full attention of the viewers and is completely extensible across all media types. It’s time to get busy living and stop running teeth whitening ads on your site.


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