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Summary:

Despite new technology that can provide more engaging and better targeted ads for online video, most publishers have been stuck repurposing 15- and 30-second TV spots online, a problem that execs say leads to lower CPMs and a poor user experience. But with advertisers and agencies […]

Despite new technology that can provide more engaging and better targeted ads for online video, most publishers have been stuck repurposing 15- and 30-second TV spots online, a problem that execs say leads to lower CPMs and a poor user experience. But with advertisers and agencies struggling, there may not be an easy fix to this problem.

On a panel last night at Will Richmond’s VideoSchmooze event in New York, executives from Comcast, NBC Sports, Hearst and blip.tv talked about how publishers were still struggling to monetize video assets online, despite an increase in ad budgets slated for online video.

While much of the discussion centered around determining the appropriate ad loads for online video as opposed to traditional TV channels, George Kliavkoff, EVP of Hearst Entertainment & Syndication, suggested that the industry should be less concerned about how many ads are being delivered, and more concerned about what types of ads are being delivered.

“I hope that the market is not going to be deciding how many 15- or 30-second ads [we're showing],” Kliavkoff said. “If that’s the conversation, then we’ve failed as an industry. I think the conversation should be about what new and engaging ads take advantage of the technology that you can deliver online with video that are not 15- or 30-second re-purposed ads.”

Even though publishers on the whole have become more interested in delivering interactive ad experiences, pre-roll is still the most common ad format for online video. That’s due, at least in part, to the wide availability of TV ad units that can be repurposed for the web. YouTube, for instance, long eschewed pre-roll video advertising, preferring instead to sell in-video ads. But the company balked when some new content partners forced it to begin running pre-rolls against their content.

But execs say it’s also due to agencies being unable to meet the demand for innovative new ad units. Perkins Miller, SVP of digital media at NBC Sports, recounted at Tuesday night’s event how he asked a number of agencies to come up with better ways to do advertising online. But out of a half dozen agencies that NBC reached out to, Miller said he didn’t get back a single workable idea. So NBC developed its own interactive ad capabilities for many of its live sporting events.

The need for publishers to develop their own custom ad units is being driven mainly by agencies that don’t have the resources to create new, interactive ad units, according to Dina Kaplan, COO and co-founder of blip.tv.

“One of the challenges is that now that clients have budgets for web video, which they do, you need to have video assets, you need to have pre-rolls, and post-rolls, and you need to have overlays. And at a time when the agencies are struggling, having to create more assets presents some challenges,” Kaplan said. “Agencies are shedding people, so how do you create more ad units with fewer people?”

Even if agencies are not able to create more engaging ad campaigns for online video, Kliavkoff said that the industry could at least do a better job of targeting the spots it has. “If all we’re going to do is take content from the TV and put it on the web, and all we’re going to do is put the same 15-second or 30-second ads on the web, can we at least target those ads? I know it’s some grand vision of the future, but i figured it would be here by now.”

Despite the lack of interactivity and targeting, the good news is that brands and advertisers are slowly moving more money into web video. Kaplan noted that while two years ago blip.tv had to fight to take ad money away from TV budgets or online budgets, her sales team had struck eight deals with eight brands in the previous eight business days — a milestone for the company.

  1. Adam,

    Just dropping a line to let you know I quoted this piece in the Flimp blog (http://blog.flimp.net/bid/27929/Video-Executives-are-Big-Fat-Whiners).

    I don’t understand why it is that the really huge players in Web media just don’t understand how content consumption really works. People don’t want to watch pre-roll ads — that’s not any agency’s fault. It’s not like people only want to watch REALLY GOOD pre-roll ads; they don’t want to watch ANY. Period. Creating more of a bad thing just seems like a complete waste of money to me.

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  2. [...] “Poor me, I can’t monetize my video” thing, a whole bunch of bigwig ad executives get together in a public forum and start whining about how their ad agencies haven’t come up with a solution for [...]

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