Summary:

Although online video continues to be one of the fastest rising ad categories, it also remains one of the smallest. So while TV networks hav…

Money - dollars
photo: Flickr / Tracy O

Although online video continues to be one of the fastest rising ad categories, it also remains one of the smallest. So while TV networks have barely been able to turn the digital pennies into digital dollars (to use NBC Universal (NYSE: GE) head Jeff Zucker’s phrase), online video is also cutting into the real money broadcasters make from TV spots. The fix for this problem is an idea started by Hulu and now being promoted by VivaKi: by letting viewers choose the kind of ad they want to see, it could generate million in new spending for the segment, AdAge reports.

Even without VivaKi’s backing of Hulu’s Ad Selector format, researcher eMarketer recently predicted that online video ad spending will grow 48.1 percent to billion this year — a fraction of the total billion in online ad expenditures expected in 2010.

VivaKi is betting that marketers and publishers will embrace the Ad Selector format because advertisers only have to pay for ads that viewers choose. Because of the promise of more engagement on the part of those viewers, publishers are promised a significantly higher rate than a basic pre-roll. For the past year, VivaKi has undertaken a study of the online video market through its project, The Pool.

So far, despite Hulu’s attraction to advertisers, Ad Selector has not gained much traction. VivaKi hopes to change that by assembling a cooperative with four tech service companies: Panache, which will handle the publisher end services, BBE’s Vindico for ad serving, Visible Measures for measurement and monitoring, and Tidal TV for ad targeting. They’ll each split the ad-serving fee, which amounts to about 5 percent of a media buy. VivaKi will not get a share, as it is content with accepting its usual agency fees.

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