For online video advertising finally found a niche

Statistics is a hard science of numbers, but sometimes it can play the role of an excellent storyteller, who in this case will tell us about how two types of online video have been disconnected - watched videos and sold videos. In December 2007, Americans watched 10 billion online videos according to research firm ComScore. For the whole of 2007, advertisers spent only $ 554 million on online advertising - based on research firm Jupiter Research. While on the Internet advertising in general, was spent 21 billion. So many people watch online videos, but so few advertisers are keen to reach them.



What is going on? The problem with advertising market workers is that YouTube’s most popular online video site is full of content created by users themselves and very unprofessionally made to advertise brands with it. Some videos are too short for a site visitor to wait for them to start by viewing the obligatory ads in front of them. In addition, people do not like advertisements that are superimposed on the videos - they simply interfere. Another obstacle for advertisers is the need to create ads in different formats for different video sharing sites. We are not talking about the complexity of the control over the effectiveness of this advertisement.

But despite all these obstacles, it seems that online advertising is ready to flourish - due to some important factors:



1. Hulu Video Website, News Corp. Joint Venture and NBC Universal (once called ClownCo), very quickly took 9th place among its own kind, while selling advertising space on an unprecedented scale. The cost of a thousand contacts was 60-70 dollars. Compare these results with the work of social networking sites that sell banners at a cost of thousands of contacts at 15 cents. Other media resources - Nickelodeon, ESPN, CNN and ABC - all gathered significant audiences thanks to their entertaining online videos.

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2. The Internet Advertising Bureau has developed new guidelines for online advertising. They include best practices, recommendations regarding advertising formats and standards for evaluating its effectiveness. The reason for this step is to save advertisers from the need to develop different types of advertising for each of the sites. “Advertising workers and website owners should come up with a unified approach (as is the case with television) in order to get rid of technical chaos with the help of standards of delivery, accommodation, control over viewing and its results. The goal is simple - the scale of the sale of advertisements should grow to the extent to make online videos a full-fledged business, ”says Steve Robinson. It was Robinson who convened a consortium of key industry participants in order to offer wide use of standard types of advertising.



3. Google CEO Eric Schmidt (Eric Schmidt) noted that YouTube's advertising revenue declined. However, he himself made a solemn promise to make the monetization of the site one of the priorities of Google. The YouTube site has already begun the demonstration of longer films created by independent directors, increasing the number of professionally produced content. In addition, video creators have the opportunity to sell their own advertising. If we take into account what minds work with the Internet giant, YouTube has every chance to resolve the advertising issue thanks to some qualitatively new technology.



4. Small and medium-sized companies are beginning to use video advertising for promotion of restaurants, legal practice or shops. This process is accelerated by the “Yellow Pages of the Internet” business directory, contextual advertising by Google AdSense, as well as video-advertising start-ups like PixelFish or TurnHere. The last two firms are in great demand in the circles of small companies that need their online videos to differentiate from competitors.



Chris Johnston (Chris Johnston) - director of advertising management company Brightcove - a successful startup, which provides videos for information sites of different sizes. Johnston admits that video advertising was a nascent medium of information without certain standards. However, it is hoped that the standards of the Internet Advertising Bureau will help to change the order of things.



“There are thousands of websites, from the simplest to the most highly specialized, that integrate video into their interfaces,” Johnston told me via e-mail. “Sometimes it is the video that focuses all the attention, sometimes the videos are only part of the overall media picture of the service. But those and others work with video content only for the reason that it is justified in terms of business. This is confirmed by the number of advertisers who bid on video advertising - starting with Proctor & Gamble and ending with the Texas State Travel Bureau. Advertising figures believe that online advertising videos are an effective way to get their message across to the public. ”

Mediation Development



For small companies, one of the most effective ways to bring their advertisements to potential customers is the video profiles of their enterprises. These short one-minute clips are sometimes similar to television or informative advertisements, sometimes more entertaining, sometimes filmed in the style of documentary films. The company engaged in the creation of such commercials, TurnHere (Emeryville, pc. California), has become popular thanks to the secondment of directing directors to shoot profiles of various companies around the world.



Brad Inman (Brad Inman), CEO of TurnHere, has become a supporter of the new idea on the Internet - “do it yourself”. He is wary of everything associated with Madison Avenue - even the development of a viral video.



“Our model originated from the tradition of documentary films,” he told me, “The advertising we made is very limited, it’s not Madison Avenue model, when the 12 most intelligent people in New York decide what advertisements should be. Instead, a local independent director will work with the owners of the hotel, the author of the work or the owner of the store - with anyone. We will tell the story of their business with the help of music and animated graphics. What we get is useful and relevant videos. ”



According to Inman, TurnHere employees created their own platform on the Internet - to receive orders for advertising, showcasing ready-made materials to customers in virtual viewing rooms, as well as for those activities that contribute not to creative work, but to income generation. Also, the company boasts a group of 5,000 directors living all over the world, whose functions include shooting video profiles of clients. The business of the firm was three to four times more productive than Mr. Inman had planned. According to him, the company shoots up to 100 videos per day. Shooting a video costs the company in different amounts - from less than a thousand dollars to several thousand. It all depends on the time of shooting and the quality of the product.



“The video is a great way to learn more about the business,” continues Mr. Inman, “a description of the services, a phone number, an email address, an image — as if you were on the enterprise itself. We like this work - it is always clear who is involved in the creation of the video. This is not a viral ad, where it is not clear what it is all about. Such a business is not for us. ”



While TurnHere focuses on documentary style firms, PixelFish offers a wider variety of services, from simple editing to more serious videos. John McIntyre, the company's CEO, told me that the company he heads is the most popular source of video advertising on Google’s Ad Creation Marketplace online service (where advertisers and video professionals create advertising for television). In addition, PixelFish works with other networks - Yellow Book and Microsoft.



According to McIntyre, the demand for the services of his company is quite serious. Profits are growing at 20% every month this year. “Last month we shot 10 times more advertising than last year. Our company creates thousands of commercials for small and medium enterprises, ”he said.



While the cost of shooting video ads is falling, it is unlikely that different types of businesses start shooting commercials for themselves. And if their competitor, a tire shop, has an advertising video on a city server like Citysearch, they’ll want something like that too. MacIntyre thinks so: “Almost everyone will soon have their own video card. If one of the plumbers in the city has its own video ad on the Internet, it will set it apart from the rest. As a result, soon all plumbers will have video profiles. It is then that the quality of the commercials will start to matter. ”



Along with video-based startups, local news sites also have the ability to shoot and sell videos within their communities to create commercials. Eric Janssen, director of the online division of the newspaper Commercial Appeal, published in Memphis, has tried various formats of video advertising for his site. This includes classic advertising in the form of banners, sponsorship with advertising embedded in the beginning of the video (the so-called pre-roll), content sponsoring for the customer’s order, advertising articles, advertising after watching the video, and advertising that is superimposed on the videos. But what kind of advertising worked best?



“Promotional articles are more useful in terms of sales — after all, they are advertisements that can be assessed,” Janssen said in an email. However, they are also afraid to spend 10% of these amounts on online video advertising. They want the click rate to characterize its effectiveness. I believe that controlling video does not help selling it. ”

Does it make sense in preroll advertising?



Advertising workers cannot all agree on whether there is any sense in the preroll-advertising that goes before the video. During surveys, many users say they hate this ad, but they tolerate it in exchange for the opportunity to watch videos for free. When I asked MediaShift readers about whatever type of advertising they would like to watch, the first answers were almost reflexive:



“I do not accept any video advertising at all. I'm already tired of seeing her wherever I look. ” So says Cheryl Colan (Sheryl Colan). She further went on to say that she could endure a short preroll-advertisement. As a result, she came to the conclusion that if you really need to insert advertising into a video, it should be very short, interesting and relevant to the subject of the video you are watching.



Jayant Kadambi, general manager of the YuMe video ad network, says it allows owners and managers of sites on its network to experiment with different ad formats. So they can understand which type of advertising works. At the moment, it becomes obvious that there is a difference in the perception of long and shorter commercials.



“With short video clips, advertisements that do not interrupt them, for example, superimposed on video, are better perceived. That is why sites like YouTube focus on this strategy, ”says Kadambi. “Preroll advertising is more suitable for longer videos, it generates high click rates. Even despite the fact that people do not like such advertising ... Advertisers like the opportunity to compare the performance of different types of advertising. If they see that one of them contributes to high click rates, they will certainly begin to use only the more productive format. ”



The problem with preroll advertising is that it is often a modified television advertisement wedged into an interactive site. Steve Safran, senior vice president of Media 2.0 at American Research and Development (a consulting firm working with local news agencies), sees the situation as follows. Unaddressed video advertising, which is sold based on the cost of thousands of contacts, does not work online, where individual marketing rules.



“The preroll advertising is coming to an end,” Safran wrote in an email. “This is the only way we have delivered advertising to users until recently. But he is exhausting himself. The audience hates preroll. Advertising overlaid on videos is more productive. In addition, thanks to AdSense from Google, it can be selected in accordance with what the user is viewing. We need to get rid of the idea that the only way to sell advertising is based on the cost of thousands of contacts. To earn, you will need millions of contacts of users with advertising. However, you will be far from serious profits. The best way to advertise a product is demographic - one user at a time. ”



Perhaps the biggest mistake is the equalization of professionally made videos and amateur videos, which are on the websites that distribute video content, the majority. Corey Kronengold is a co-owner of Online Video Watch and director of marketing and communications for the Tremor Media online video advertising network. According to him, there is a big difference between the content created by the users themselves and those videos with which advertising figures work comfortably.



“This difference is becoming less noticeable, but users will have to accept the fact that the content is not free. You need to pay for it either with the help of advertising, or by creating a paid registration on the sites (or some other way). Users made it clear that they do not like advertising, but do not want to pay for the content used. And we, as an industry, have not yet figured out what the public really wants. Although it is very important to continue to openly communicate about the content generated by users, and its differences from the created professionally. If you watch the Lost series with the ABC.com online player, you’ll see less advertising than on television. This is a great example of exchange value. But you can't create the same advertising experience when working with YouTube-style videos. ”



Translation: Roman Yuriev, toodoo (http://toodoo.ru) is a social network of saytofanantov.