No Crystal Ball for Online Video Advertising: Here’s What Works

A panel of experts said that pre-roll ads will likely fall away, but what will take their place is a mystery.

By Troy Dreier 

What's coming up in online video advertising? What new formats will satisfy content creators, advertisers, and audience alike? A panel of experts at the Streaming Media Europe 2011 conference in London, England, said the outlook is hazy.

All we know, offered Dan Ruch, vice president Europe for online ad companyTremor Video, is that viewers will watch 30 seconds or less of advertising in exchange for watching premium content.

The space is moving quickly, said Ruch, and seeing two to three years into the future isn't possible. The best that companies can do is think about the next six months. The industry still needs to standardize around online ad formats, something he believes is a year or two away.

Tremor releases a new interactive format each quarter, said Ruch, looking for ones that work. It's healthy for the industry to experiment, he added.

Rather than waiting to see what video ad formats dominate, panelist Oli Newton, head of emerging platforms for Starcom, encouraged people to get in while it's still affordable to make mistakes. The variety of devices in use today is a challenge for advertisers, he said. Even the Android operating system involves multiple versions and multiple screen sizes.

While it dominates now, Newton didn't think the pre-roll format will win out in the end. Pre-roll is simply overlaying something that works on television, he said, and has the problem of not being clickable on mobile devices. He sees that changing over time. Five years from now, he believes we'll look back at pre-rolls as entry-level.

For Keith Zubchevich, vice president of market development and operations at Conviva, finding the optimal ad format means building something that works effectively and then driving behavior. Zubchevich emphasized the value of Conviva's technology, which results in less video buffering, as a way to get viewers to stick around longer, visit more often, and view more ads. Having useful real-time data, he said, lets advertisers tweak campaigns for instant results.

Newton agreed, saying that when online companies get the user experience right, viewers flock to their sites. That's why the BBC iPlayer is so popular, he offered, and why it's so far ahead of its competitors.

While the future of ad formats is hazy, Newton suggested that publishers and advertisers focus on mobile for now, since the use of mobile video is growing dramatically. Feature phones are starting to fall away, while smart phone use will only increase. If you don't have a mobile strategy, you don't have a future strategy, he said.

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Monetization and Video Advertising Formats

Moderator: Tony Klejna, CEO/CSO, Contributing Editor, Streaming Media Magazine, High Park Media, LLC
Oli Newton, Head of Emerging Platforms, Starcom
Daniel Ruch, Vice President, Europe, Tremor Video
Stanislas Segard, Rich Media and Video Business Manager, DoubleClick
Keith Zubchevich, Vice President, Market Development and Operations, Conviva

For all the buzz about online video advertising, most content owners have yet to be able to turn their online video from cost centre to profit centre. Still, strong signals suggest that video monetisation is around the corner , provided content owners don't pull back in today's tight economy. What will it take to reach that tipping point and what direct cost and revenue impact will it have on content owners? With all the different ads formats on the web today, which ones have the greatest ability to help content owners monetise content and why?