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April 15, 2008

Beyond the Pre-Roll: That State of Online Video

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Second to last panel of the day and my headache has definitely arrived. Anyway, enough about me, it’s time to get started. Our panelists are: Eric Hadley (heavy) [I think we can do without the editorial commentary, Susan. - Lisa], Rebecca Paoletti (Yahoo), Chris Allen (Starcom), Scott Holmes and Jarvis . Our moderator is a nice blonde woman who hasn’t given us her name. Oh, it’s Daisy Whitney. Cool. She’s pinch hitting for her editor. What’s with Ad:Tech and all these unexpecteds?

She goes quickly through some various video ad options.

Daisy hates pre-rolls but not as much as her boss who she’s pretending to be. It goes against the grain of the Web medium. It’s not interactive; it’s very television 1.0.

Chris Allen gets to go first: He likes pre-roll ads. It’s an easy way to get people into the online video space. They prefer short-form ads, 15 seconds or less. They really just want to get their clients to try it at least. The recall numbers are huge and that’s with repurposed creatives which make them wonder if they even need to make new creatives for online.

Scott Holmes thinks that 15 seconds is too long. 5 seconds is better. If it works, if it isn’t obtrusive, then he’s okay with it. [Five second ads? Wow - Lisa]

Jarvis says that right now what people understand is pre-roll. There are a lot of other formats than just the pre-roll but this is what they know.

Daisy says other than overlays, she still feels like what the majority of what she sees are pre-rolls. How far out are we from other formats?

Rebecca says at this point 80+% of ads are pre-roll, that’s just where they are. It’s what they’re capable of. They offer more choices but the bulk of people are going for what they know. It’s baby steps getting people into this. Right now people are at CPM but what they want to get to is CPE, cost per engagement.

She likes to start meetings with a question: What do you value per second of engagement? Right now they’re in case study measurement mode so they can figure out how much it’s worth. They need more data, basically.

Daisy points out that it also depends on which numbers that you use. Is it Neilsen, is it ComScore, is it internal?

Jarvis: Where does the money come from? What’s going to lose budget so that I can get into online? Is it worth taking money from?

Eric says Heavy doesn’t do pre-roll ads. They have an interstitial, skins around the ad and every three videos or so, they’ll show a mid-roll. The user gets the content first, it keeps them engaged and it keeps the advertiser happy.

Daisy: That’s what I like as a consumer. I like overlay ads, I like ads that don’t interrupt my experience. If it takes over my screen or my experience, I don’t like it. There are so many efforts out there among consumers to block ads that I think come from people not liking the interruption. She does like the ‘brought to you by’ type sponsorship ads as well.

Chris: I think we’re trying to tell you a story in the ad. Sponsorship doesn’t tell you about the company. Overlays aren’t engagement. The nature of advertising is a little intrusive.

Daisy: Maybe it shouldn’t be.

Rebecca and Chris are all about tiered pricing. Rebecca says that if you get into targeting, pre-rolls aren’t as intrusive if it’s relevant to you. You won’t mind to see an ad that you’re interested in.

Daisy: Scott, when you’re thinking about targeting, how far away are we from real targeting? People are saying they can do it but as a consumer, I’m not seeing it.

Scott: We’re still a long ways away. For now it’s not about targeting so much as it is about understand where that stream is, where the user is. You need to come at it from a much higher level and not forget about new media when you’re building all your other marketing. You need to tailor an experience for what’s going to engage the audience.

Daisy: People need to factor online into their creation process. The broadcast networks had to do it when they started to create broadband content, an extra hour for outtakes or something. They did it, so why haven’t the advertisers done that piggy backing as well?

Jarvis: They’re not thinking about it yet. They’re thinking ‘this is my television budget’ not that they also have online creatives to make.

Eric: They do production for their advertisers in some cases and they incorporate it into their pricing. Some advertisers know that if it’s on corporate.com no one will watch it but if it’s on heavy.com they might watch it.

Daisy: Why would someone watch that?

Eric: Because it’s funny. They’re made to be entertaining, they have their own channel, they’re also mid-rolls, etc. If something is less of a challenge to get people to watch, it might cost them less.

Daisy: Why aren’t they using re-purposed spots?

Eric: It’s not that they can’t, it’s just that we have that capability and we know what’s relevant to our audience? They measure via recall as well as how many people watched something. They want to deliver great content.

Daisy: What is the state of video supply vs demand?

Jarvis: There’s a dearth of supply vs demand. It’s going to get better though because viewers expect more information on demand and it’s going to have to be online. The audience is going to drive demand for content.

Daisy: What about the Web series that aren’t running ads. It’s not Heavy, it’s not Yahoo Video. It’s the independent Web series that aren’t established. Are people interested in advertising on something like that? How to those people get bought?

Scott: I think it’s a buyable model. If you create Web content and it’s 6 episodes, I think it’s very much competitive. The people who know how to make content are going to get involved in this space.

Question & Answer

Do you see any standardization in video advertising coming about? Right now everyone has their own standards.

Scott: It’s workflow. You have to get everyone to the table. Right now there are far too many ‘standards’. There are no standards. On the Web you can do anything. The question is, “how are you going to do it in relationship to the campaign?”.

Chris: There have been some standards that have been put forward but really we’re just emerging from the testing states. Now we’re starting to look at the longer term strategies including online content and we’re able to have this conversations.

What’s the state of user activated advertising? Like for product placements and such?

Rebecca: That’s fun but the problem is that users don’t know to click. They’re used to TV. You have to give them a cue of some kind, make the object glow or put a note on the side. They just don’t know otherwise.

What’s the most effective video categories?

Chris: That’s a difficult question. It really depends on what you’re looking at. Banners draw more clicks for example.

No one really seems to know the answer to that one.

Why do advertisers think the pre-roll is more valuable? How do you educate people that that isn’t true?

Eric: We feel it’s more about the end user. If the user turns away from the content, then you lose the long term possibilities.

Chris: You need more testing.

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