Streaming Media East 2007: What’s Next for Online Video Advertising?

CondeNet’s Glosser suggested pre-rolls will continue to come in different lengths and that a ratio strategy will emerge. "A ratio of length between the pre-roll to the actual content itself is important," he said. "Pre-rolls should be balanced against the length of the content in a way that consumers feel like they’re getting more content than advertisement."

"In some ways, the toothpaste is out of the tube," Jose Castillo, President of thinkjose, LLC, an attendee at the session, said afterwards. "Consumers have been used to watching video in a particular way, and pre-rolls work against that model, so much so that consumers will often try to find the same content elsewhere on the web without the pre-roll."

When asked by the moderator to describe the basic difference between a TiVo/DVR and web video, Avenue A’s Lockhorn answered with one word: choice. When asked to expand on that he noted that choice is the driving factor of the web’s video content, but that the ability to find it all is the Achilles’ heel. Anthony added that compelling web content transcends the TiVo and other DVRs because web video inherently allows for time- and place-shifting without the need for a specialized device.

What Might Work
When Marcus pressed for models that work, panelists presented a few ideas.

One model suggested was that ads positioned below or beside the actual video content may offer potential eyeballs without creating annoying distractions. While the model was tried numerous times in the late 1990s but rejected because click-throughs weren’t high enough, primarily since peripheral ads were less effective than pre-rolls, the ad agencies represented on the panel felt the consumer has matured to the point where these ad models could work.

Another option was that Flash-type (or Silverlight-type for those interested in Microsoft’s upcoming offering) overlays could be used at key times to place short interstitials (video ads lasting 5-10 seconds) to which the viewer would have to respond before the content would continue playing.

Echoing a theme that had appeared several times throughout the panels at Streaming Media East 2007, Schleider also noted that the ROI models for video CPMs could be raised to a higher per-CPM rate, given the effectiveness of online video advertising in generating click-throughs.

"While an advertiser might pay a higher CPM for an online video advertisement," said Schleider, "the ROI is justified on the conversion rate."