Video DSP TubeMogul recently tested pre-roll ads across 7,000 sites and discovered more that 400 sites were running potentially 3 million fake pre-roll impressions daily. These fake pre-rolls include videos auto-playing within small and below-the-fold video players or within banners.

So what’s the solution? VERIFICATION! I can already hear the grunts of dismay. Well, TubeMogul’s PlaySafe verification tool does not use white lists but the video DSP’s analytics platform to detect ad unit and video player size as well as other attributes to determine the viability of an ad units. When it detects pre-roll fraud, PlaySafe shifts budgets to legitimate sites that are performing better for the advertiser.

There is no black list per se — while TubeMogul has a slate of sites with (let’s call it) bad pre-roll etiquette, many have run afoul by accident. So TubeMogul is checking sites for fake pre-roll on a campaign by campaign basis, exiling a guilty site only for the remainder of the campaign.

In light of this, advertisers must find a way to leverage their existing content on TV screens across multiple platforms. After all, eMarketer estimates that advertisers collectively spent $60.5 billion on commercial time this year, or 39.% of all ad spending. Dynamic video advertising is one way publishers and buyers can reach this fragmented audience to remain relevant and compelling, all while keeping messaging and brand identity consistent.

While there is a large opportunity for advertisers online, many struggle to find a platform or format that effectively straddles multiple devices. Often rich media ads that can run on a desktop do not function on a tablet or mobile device, ruining the user experience and wasting valuable ad spend.

That is why advertisers and publishers must work together to evaluate the most effective ways to take advertising cross-platform and target the growing audience of mobile and tablet owners. While pre-roll video advertising is similar to TV advertising and high impact, it can limit buyers due to limited availability of premium inventory. In contrast, in-banner video ads leverage the flexibility and vast reach of display to maintain a high-impact experience where consumers choose to watch video ads.

The Pressure on Publishers

As more brands look online, publishers feel the pressure to create a seamless process for buyers. Creating and leveraging the right monetization models will also be essential for publishers. Leaving behind the un-targeted, “spam” roots of display ads, publishers are evolving to meet the dynamic, video-enabled demands of a TV-minded audience and advertisers.

Through technologies like HTML5, publishers can offer the option to create and place in-banner video ads that are as visually compelling as TV ads, while reaching those tuning out their TVs and tuning in to laptops, phones and tablets.

Dynamic video advertising benefits publishers in three ways:

1. Unlike other types of video advertising, any publisher can offer dynamic in-banner ads to advertisers with existing video assets, as display ads are ubiquitous.
2. Compared to in-stream video formats, in-banner display ads can increase monetization due to much larger holding capacity, and opportunity for premium pricing compared to basic banner ads.
3. Dynamic video advertising is easy for publishers to execute, providing buyers with the most flexible in-banner video programs to engage their audiences – across the web and connected devices.

Why Buyers Must Sell Online

Forty-five percent of iPad owners said they were more likely to click on ads that included multimedia, versus 26% of iPhone subscribers and 27% of other connected device owners, according to a earlier Nielsen report released in October 2010. Nearly a quarter (24%) of those same iPad users went on to make in-store purchases based on the ads they viewed, illustrating the impact of rich ads on this audience.

Buyers have a tremendous opportunity to drive sales and reach this open and receptive audience that is interested in making purchases. By leveraging dynamic, in-banner video ads, advertisers can create compelling experiences for consumers that extend across all platforms, increasing visibility and brand awareness.

The Nielsen report last week provided statistical backing to a growing consumer trend, illustrating how they consume content across different screens. With this shift comes an opportunity to create ad content for multiple screens, redefining the ad experience for consumers and enabling a more creative approach.

As the number of tablet and mobile device users grows, buyers and publishers must evaluate how they are advertising online, and what technologies enable a seamless experience that translates across multiple platforms.

YuMe witnessed a 50% increase in in-stream impressions served between the third and fourth quarters. Pre-roll represented 96.7% of YuMe’s 4Q volume, with 15-second spots comprising the majority (57%).

Almost 11% of video ads served went to California, with Texas drawing 6.8% and New York receiving 6.2%. Here’s a neat chart that shows where video impressions landed:

The rise in revenue can be attributed to many factors, such as more interesting creative (check out YuMe’s latest ad units) as well as advances in targeting. In particular, Media6Degrees, the original social targeter, has introduced its technology to the space with some impressive preliminary results — just like in display, social targeting beat out its behavioral and contextual cousins while the video completion rate was significantly higher than the industry average.

CEO Tom Phillips gave us more details on the mechanics of social targeting, how the system works for video advertising and his affinity for ’70s glam rock.

ADOTAS : Would you mind dumbing down the concept of Social Targeting for us lay people?

PHILLIPS: Social Targeting™ is based on the idea that the people who decide to visit a particular site on the Internet share something in common which drew them there. If some of those people have purchased a particular product from our advertising clients, we take that as a signal that others who visited that site may be interested in buying the same product.

Why do you guys consider yourselves the inventors of Social Targeting?

Media6Degrees trademarked the term Social Targeting to describe our precise methodology, which is a dramatic departure from traditional targeting methods. Rather than building descriptive profiles of consumers and targeting against those profiles, Media6Degrees is the first company to apply social science principles to ad technology and to answer the call for a targeting methodology that holds user privacy and ad performance as equally important objectives. We encourage everyone to read our seminal research paper, which we published in 2009.

How do your methods of Social Targeting compare with your so-called competitors? It’s OK to say yours are better — as long as you explain why.

From our vantage point, Media6Degrees’ Social Targeting is truly unique in the marketplace. We believe other companies that describe their solutions as Social Targeting would be more accurately described as Friend Targeting. Those companies attempt to establish one-to-one relationships between people (i.e., recreate the Social Graph) and believe that if one person purchased a product, the people they have personal relationships with should be targeted for the same product. To use an offline analogy, it’s the difference between considering the people you are sitting with at a restaurant versus considering all the people who decided to eat at that same restaurant.

Why should consumers embrace and not be afraid of Social Targeting? Is there anything creepy about it?

Because Media6Degrees’ Social Targeting methodology does not analyze page content, store URLs, collect personally identifiable information or build personally descriptive profiles of users, we are confident that we provide a truly privacy-friendly advertising solution. Good advertising provides valuable information to consumers and the financial support publishers need to create the content we all love.

How does Social Targeting for pre-roll video differ from display?

The Social Targeting methodology is exactly the same, only the ad format is different.

Why do you think Social Targeting in pre-roll performed better than demographic and contextual targeting in your initial campaigns?

For the same reasons Social Targeting outperforms other methods for display. Everything we do starts with the marketer’s current customers and targets people who have made similar decisions based on where they gather on the Internet.

Though online video advertising has bloomed this year, what factors are holding it back?

Initially, our challenge was a lack of cookie-targetable video inventory. Recently, partnerships, most notably with BrightRoll, Adap.tv and AdBrite, have enabled us to apply Social Targeting to pre-roll video inventory.

Are clicks more meaningful in video advertising than in display? What do you consider their importance compared to video completions?

We asked our clients and, at least for now, they are looking at both metrics. More important, they are reporting that pre-roll delivered via Social Targeting is driving higher click-through rates and a video completion rate significantly above industry average.

Does the consumer practice of regularly dumping cookies actually work to M6D’s advantage?

The impact is hard to quantify and not something we put much focus on. We think it’s important for consumers to exercise choice in managing their cookies or to opt-out of targeting entirely. Our technology is built to accommodate those choices.

You spent three years at Google, including serving as architect of the DoubleClick integration and director of Search & Analytics. How has that experience influenced your tenure as CEO at M6D? What lesson has come in the most handy?

It is a long list for sure. Part of why Google is so admired and successful is that rather than applying offline methods to online situations, they consistently use technology to solve problems in ways that could never be achieved offline. For example, before Google, there were companies whose idea of search involved categorizing websites by topic (like an online Dewey Decimal system). Google created its Page Rank algorithm and the rest is history.

We feel many existing ad technology solutions are simply trying to transfer offline models to online advertising. We also believe that our methods use technology in novel ways to solve advertising in a way that could never be achieved offline. Copying offline models certainly makes for an easier technology sale, but we are confident the industry increasingly understands the difference.

How about your experiences as publisher of the infamous Spy magazine? What has been the benefit of traversing the media spectrum — from offline to online, from publishing to advertising technology?

Now you’re talking about pre-history! As much as I loved Spy as a print magazine, if the Internet existed in 1985, we would have been online. In fact the Spy team still jokes about how we could have been the first great Internet property – if only we could shift time by 10 years.

What do you think is the next step for Social Targeting in general and Media6Degrees specifically? What other frontiers are you looking to tackle? What still needs improvement?

In terms of new frontiers, we have started applying Social Targeting to help our clients target offers to shoppers arriving on their site. Clients have told us that as many as 90% of their site visitors are first-time visitors. We are applying our same Social Targeting methodology to select the best offer to highlight for that arriving cookie.

We are also rolling out Social Targeting solutions for publishers, which will help them target inventory more effectively and drive more page views. Perhaps we can have a separate Q&A around those initiatives in the near future.

Word has it you love 70s glam rock and that conference rooms at M6D’s offices are named after legendary NYC rock venues. Pop quiz: though David Bowie wrote the tune, whose version of “All the Young Dudes” is better — Bowie or Mott the Hoople?

You’re dating me, but I didn’t know Bowie recorded his own song. Mott wins.

Who killed Ziggy Stardust?

Well, Iman, I suppose. And we’re all better off for it. By the way, when we expand on to another floor in our building, we’re naming the conference rooms after noted spouses of beloved rock stars.

However, YouTube is threatening to knock the video advertising paradigm on its head by allowing viewers to skip over in-stream ads and choose their own pre-roll. I first heard mumblings TrueView’s skippable ads at a Google cookout focusing on display initiatives, but AdAge reveals that they’re shortly to come to the video-viewings masses.

During shorter content, users can skip through in-stream ads while longer-form videos will present viewers with the choice of one of three selectable ads viewed pre-video or ad breaks that may or may not have the skip option.

It’s a bold move, and both consumer- and advertiser-friendly — advertisers are not charged when users skip through videos and they can get a better sense of what campaigns are most appealing to certain audiences. Google will initially launch TrueView with managed accounts before unveiling them to all advertisers.

Is Google’s TrueView a sign of video advertising to come, or simply something the company can pull off because YouTube garners such a high share of video views?

Which is why my ears perked up when Qoof launched its interactive in-video advertising app platform (geez, that’s a mouthful) last month, a solution that basically turns video and rich media ads into apps. Once CEO Jonathan Stefansky walked me through a demo, I was completely sold.

Without pausing the video or taking the user away from the current experience, menus within the video ad offer viewers access to additional advertiser content such as photos, product schematics and customer reviews. Its also enables sharing through social networks, email and even Skype.

Etailers can add shopping functions for advertised products. Menu placement, background themes and all other options are easily customizable and an open API makes integration with most video players.

Qoof has just partnered with Brightcove to enable the users of its online video platform to turn their video ads into apps and access Qoof’s analytics. Stefansky took a minute to give Adotas some more details on the deal.

ADOTAS: What’s most advantageous about this partnership for Qoof advertisers?

Stefansky: It gives them a fast and easy way to use the Brightcove and Qoof platform together as they can distribute via Brightcove after quickly creating interactive videos on Qoof. It also allows existing Brightcove clients a simple ease to use way to monetize their videos by making them interactive without having to make any changes to their existing website infrastructure. That is, they can leverage their existing Brightcove implementation and add this layer of interactivity on top of those players.

What other kinds of partnerships are you examining for further expansion?

We will be announcing partnership from companies across the video ecosystem that want to provide interactive capabilities to videos and other types of rich media. This includes ad networks that want to give advertisers the capability of turning video ads into interactive ads, other player companies, Web video hosting sites and third party vendors that want to add apps to the Qoof platform so that their services, such as a shopping cart or chat box, are accessible from within videos that use Qoof.

Any hints on what additional features Qoof would like to offer?

Qoof will be making an announcement shortly for a platform enhancement that makes it very easy for anyone to add their own app into the Qoof platform.

BrightRoll will soon find out as today it introduced the ability to execute both mobile and online pre-roll video ad campaigns from a single platform.

In addition to the network’s online targeting and optimization tools, mobile inventory can be targeted by criteria such as device and location. BrightRoll can adapt TV or online videos into pre-roll units optimized for multiple platforms, including the iOS and Android.

“While we’ll bring the same value to mobile that we bring to online in terms of research, optimization and targeting, the sheer increase in scale that mobile inventory represents will fundamentally improve the results we’re able to deliver to our clients,” said BrightRoll CEO Tod Sacerdoti.

Mobile inventory can also be purchased on the recently launched BrightRoll Exchange (BRX), a self-service video ad-buying platform.

With advancements in the smartphone market, new tablet PC form factors and other larger-screen mobile devices pushing consumption of online-based video, the increase in available content will be the core growth of digital video advertising inventory. Wherever consumer eyes wander, you can be sure that advertising will follow — and the rate at which consumers are consuming video on their PCs, their mobile devices and Internet-based TVs is growing rapidly.

According to the Nielsen third-quarter “Three Screen Report,” online video usage is on the rise, with Internet users watching 53 more minutes of video online in third quarter 2009, a 34.9% increase in viewing time from last year. In addition, the number of people watching mobile video has grown 53% year over year.

With more video being consumed on these alternative screen devices, brands will find new ways of advertising during this content and will subsequently continue to spend more on video based ad formats. Forrester predicts that video will be the fastest growing area of display advertising over the next five years.

Getting in Touch With Interactivity

As the inventory for online video ad placements has increased, advertisers have been quick to fill it with simple in-stream ads (pre-roll, mid-roll, post-roll). Consequently, a customer experience issue has arisen.

This is a different beast than your traditional cable or broadcast viewer: Don’t expect them to sit through 15 or 30 second in-stream spots that have been repurposed from your broadcast campaigns. Online consumers expect more and are driving innovations in our industry with the power of their clicks and engagement.

In 2010, advertisers, publishers, agencies and technology companies will continue to push the innovation curve with advancements in online and mobile format by focusing on developing highly custom, interactive and engaging video-based ad formats.

Premium content publishers like ABC, CBS and NBC have had huge success enabling their premium full-episode player environments with custom, immersive advertising experiences. In 2010, look for new technologies, formats and features that truly engage consumers, and offer opportunities to do way more than just watch the seconds countdown until their video resumes.

‘True’ 3D… Coming Soon to a PC Near You?

Three-dimensional movies like “Avatar” and “Up” have been a hot topic over the past year with ticket sales reaching record numbers as audiences have lined up at theaters for these incredible movie experiences. Will 3D make its way into our TV and PC viewing experiences in the near future, forcing advertisers to get on the 3D train?

The topic of 3D can be a confusing one as it relates to the interactive world when compared to the “stereoscopic” 3D world of movies like “Avatar” that we see in IMAX theaters. Digital technology companies like Unicast are pushing the envelope with rich media technologies (like Papervision3D) that enable the delivery of real-time, rich, three dimensional online and mobile ads.

You’ll certainly hear a lot more about 3D in 2010, but 3D comes in many shapes and sizes — especially in the online advertising world. I wouldn’t be surprised to see companies emerge with software and hardware solutions for online stereoscopic (“Avatarlike”) video in the future, but I wouldn’t hold my breath if you are waiting to see it in an ad near you in 2010.

HD Online: Gaining Traction

Hi-def content has become commonplace in our living rooms. The question for online advertisers is, why haven’t we seen the same adoption curve in video content online?

The simple answer is in the economics. The cost of serving an HD video file over the web is still much higher than a standard definition video file. This along with the variability of serving cost when offering users the choice between HD and standard video viewing has made advertisers reluctant to expand heavily into HD video for their ads. In 2010, look for continued reductions in serving costs and alternative pricing models that will empower advertisers to explore options for HD video ads.

Continued Online/Offline Integration

Now that video is completely digitally based, it seems inevitable that the two distinct advertising operational structures that we see today across advertisers, agencies and publishers will eventually converge and realize efficiencies of a truly unified model for video-based ad operations across traditional broadcast/cable and online/mobile platforms.

Integration is definitely a hot topic. According to a recent Forrester “2010 Predictions” report, “online technologies and processes are seeping into television media. … Television buyers and sellers should spend 2010 learning from their online brethren how to target, optimize, and automate bid-based buys in order to be ready when the television upfront takes a backseat to the ‘online-like’ rules of order.”

The reality is that there are a lot of factors that will prove to be influencers, or barriers, to this convergence. There is not yet a consensus in our industry on how or how much these two video workflows should converge.

In 2010, I expect that the following trends will continue to make this topic one to watch:

• Growth in the prevalence of online video (in terms of both content and consumption)
• The continued shift in budgets being allocated towards online and mobile video related media buys
• The desire for more robust and consolidate metrics and analysis around video campaigns across mediums
• Economic conditions and the forced reduction of staffing models employed by agencies, publishers and advertisers
• Technology advances in TV, mobile, cable and PC hardware

What other trends do you expect to see in digital video advertising in 2010? Share your opinion with the rest of the Adotas readership by leaving a comment.

Somewhat similar to Jivox’s new interactive rollover product, Triple Play adds an interactive menu with three options to the end of a five to 20 second ad. However, YuMe’s offerings are entirely focused on in-stream video.

Triple Play is the lates video ad innovation from YuMe, which in 2009 also introduced InSynch Video Takeover, which synchronizes in-stream and banner ads on a page, and PowerRoll DataConnect, which allows marketers to include an xml feed in an in-stream ad.

YuMe’s fourth quarter 2009 was its most impressive with more 2.5 billion in-stream ads served. The company boasted an average of 30 million in-stream video ads served per day in December 2009.

You give them something to do. Something to click.

At least that’s what worked for ScanScout. The network’s Super Pre-Roll video ads offer interactive elements (shiny stuff). For example, in a recent campaign for Vaseline, a survey playing off of the ad’s visual theme lets you know what percentage of respondents also look for a silky smooth feeling in a moisturizer (24%, apparently).

People do love to pick up… I mean, click on shiny stuff — Super Pre-Roll Ads on the network had a click-through rate 350% higher than plain ol’ pre-roll ads.