Blog Post

How ad agencies are a bottleneck in the video economy

Online video is flourishing. Better technology and more bandwidth means consumers watch more video in more places than ever. But there is also a roadblock that is slowing digital video’s evolution into a fully mature economy like television.

And that bottleneck is … advertising. While developers and publishers have evolved to support a digital video eco-system, advertisers are a step behind. The problem is common to all sorts of media transitions: the impulse to replicate old experiences on new platforms.

YouTube’s(s goog) director of product management, Shiva Rajaraman, summed up the situation at this week’s Mobilize conference. Rajaraman explained that many conventional constrains of video advertising — especially the 15 or 30 second time limits — are artificial and dictated by the strictures of traditional TV. But in the online digital environment, many of those conventions don’t apply and there is endless opportunity for new types of creative ads.

Ad agencies, however, have been slow to pick up the ball, according to Matt Minoff, the CEO of Selectable Media. Minoff’s company makes a business of dropping short video ads into places where viewers might encounter a paywall or an offer to buy something. In practice, this might means that a video game player can receive virtual goods in exchange for watching a video. The player might see a screen like this:

If the player wants to earn the virtual cash, they can choose from a variety of videos:

After watching the video, the viewer receives a benefit such as virtual goods credit or access to an article. Minoff says publishers are embracing the ads and viewers are willing to watch them. His company is profitable and growing but he says appropriate ads are in short supply.

“What holds back advertisers from taking advantage of new platforms is that have to repurpose creative built for TV. They’re utilizing 30 second TV spots online and for mobile.”

Minoff believes that ad agencies should consider reallocating their budgets to create more custom content for online platforms. While this would take a larger investment into creative, the potential pay-off could be large if it improves advertisers’ ability to deliver the rights ads in the right situation.

(Image by Jacek Chabraszewski via Shutterstock)

5 Responses to “How ad agencies are a bottleneck in the video economy”

  1. Nicola Rovetta

    Are we speaking about really engaging content, or about these video ads which will make you earn credit, but you will be totally blind to? The latter are totally similar to “interruption” advertising: they’re not “pull”, they’re “push”.
    If we are talking about engaging video content, Agencies face two problems:
    1) Attitude. Creatives are not trained to design “content”, they’re trained to think ads. Accountants are not trained to sell content, they are trained to sell advertising.
    2) Profitability. The agency is not producing content internally, they pay for it, so it results as a cost. Each new player in the market has something to offer for free: media companies have space and they can give away content; content and publishing companies are producing content for themselves and they can give away content; the only one who pays for all, and doesn’t own nothing but ideas, is the Ad Agency. And to date, ideas are not enough.

  2. Video holds enormous potential for mobile advertising opportunities. I think mobile ad networks are starting to catch on. Last month, Airpush excited the ad community with its new SmartWall ad format through Airpush SDK 5.0 ( ). In the big picture, this is just the tip of the iceberg. I can’tw ait to see how sophisticated the tools, resources, and platforms for mobile advertising become in the months ahead.

  3. Mitch Drew

    I agree. At our agency we look at online video as a way to showcase video content that is either too long for TV (like a 1min cartoon we created for a Theme Park)…or lower quality and ‘the making of..’ videos showing behind the scenes content of when we shoot the commercials. It’s a great idea to look at online video as the ‘other place for other video’ and shoot specific video for each format. Have a look at our work at

    • You should consider working with Vungle. They produce 15 second high definition ads in-house. They also have a very high volume ad network on both the Android and iOS platform. You could add them to your repertoire have some added leverage on the mobile side with your clients.