Almost Grown: Advertising Year in Review
As with all analyst projections on market sizes, there are those who dispute these numbers. While some of the projection disparities can be chalked up to measurement differences, the scale and scope of projections is vastly different. For instance, at year’s end, Forrester Research predicted that online video advertising is set to top $7 billion in 2012.
"Online video advertising is the fastest-growing category of online advertising," said James McQuivey of Forrester Research, "and at $7 billion in 2012, it’ll be one-tenth of the whole television advertising pie."
As the eMarketer report shows, the world of rich media advertising goes well beyond the boundaries of video ads tied to video content. In fact, a large growth area continues to be the use of video in a banner ad. Most auto-play video ads embedded in a banner now default to no sound (in other words, they begin to play with the sound off, but they have easily accessible video and audio controls also embedded in the banner ad). These controls are often Flash-based, but a few Silverlight-based ones are also popping up on the web. In some instances, a video ad also converts to a banner ad after the video content is shown.
Online Ad Types and Placements
These types of ads generate significant click-throughs and replays, even if only to hear what was being said during the ad. DoubleClick released a report in early 2007 that strengthens the eMarketer report and also shows why advertisers continue to show interest in online video advertisements, using aggregated campaign performance metrics of online video ad placements from more than 300 campaigns for 130 advertisers.
Rick E. Bruner, research director, and Jai Singh, research manager, noted DoubleClick’s findings that "users click the video Play button more than they click on image ads, generating about three times the replay rate versus image ads." They also found that click-through rates are far higher than image format ads because users click on video ads about five times as often as they do on image ads (up to about 8% of total ads served). The report also noted that size doesn’t necessarily matter, as "play-through rates do not vary greatly by expandable or standard video ad formats," but that all video ads, on average, play two-thirds of the way through before a user clicks on to another page or clicks through to see the product or service being advertised. The report can be found at www.doubleclick.com/insight/pdfs/dc_videobenchmarks_0702.pdf.
Another trick that advertising agencies are pitching is multiple forms of advertisement on the same page. The idea, dubbed a "companion banner" by some, is that a skyscraper or top-of-the-page banner would run to emphasize the video content that might be lower on the page.
Hotspotting also continues to progress as a method of online video advertising, trailing preroll and interstitials in much the same way as targeted advertising within television programs (think Apple MacBook product placement in TV shows or movies). Hotspotting, or clickable video, gained a set of key tools in 2007 with the advent of Adobe’s Flash CS3, which added many video-interaction tools directly within the program. Hotspotting has obvious implications for product placement, but the question that arises both in online video and IPTV is whether consumers want to be bothered with actively clicking on something while they passively watch primary content.
Placement of ads within other video content is still in the experiment stage, as media buyers play around with proper locations. This is especially important in longform content of 30 minutes or greater, as Kelly Egan, VP of business development at Swarmcast, noted in a mid-year interview.
"Knowing what type of ad to buy and where it might be streamed in can also impact campaign effectiveness," said Egan. "If, for example, an interstitial will be streamed in at the 20-minute mark of a 30-minute program, the bulk of the viewers may have already dropped out at that point, and your ad really won’t be seen."
Egan continued by noting that longform content—unlike the shortform content on YouTube and other "clip" sites—is typically encoded to full-screen, which means that the video advertising going along with the longform content must also be able to meet the quality level of full-screen playback. This, in turn, means that network strain and cost to deliver also increase as longform content is typically streamed at data rates of 1.5Mbps and higher.