Making an impression

Developing profitable advertising-supported video content can often prove as technically challenging as distributing that content online. Jeff Whatcott offers some helpful tips for maximising advertising revenues from web-based content.

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By  Jeff Whatcott Published  February 17, 2009

Developing profitable advertising-supported video content can often prove as technically challenging as distributing that content online. Jeff Whatcott offers some helpful tips for maximising advertising revenues from web-based content.

Internet TV use has reached record highs and online video advertising spending continues to skyrocket. According to eMarketer, ad spend on online video will grow from US $775 million in 2007 to more than $4 billion in 2011. That represents a fivefold increase in per-viewer spending, from $3.59 per viewer in 2006 to $23.50 per viewer in 2011.

The trend is clear. Marketers find Internet TV an effective way to reach and engage their target audience and because video lends itself so well to rich media and new advertising opportunities, Internet TV commands significantly higher ad rates than traditional web advertising. Media companies and web properties recognise this promise and are racing to get video online.

Simply having video on your site, however, is not enough to secure advertising dollars. You need a comprehensive strategy that begins with an understanding of the fundamentals of Internet TV advertising.

Your Internet TV advertising strategy goes hand-in-hand with your online video strategy. Before determining specifics such as ad formats and impression frequency, ask yourself why you want video on your site.

While you may want to generate advertising revenue, you probably also want to increase unique visitors, time spent per visitor, and repeat visits to your site - all of which relate to increasing your audience share.

Just as your online video strategy focuses on your audience, so, too, should your video advertising strategy. Video increases revenue opportunities throughout a site, not just within the video. Focusing solely on advertising opportunities within the video window fails to capture the full value created by integrating video within your website.

A more effective approach is a plan to monetise the audience you're building at your site, not simply the video. Your plan should include advertising throughout your site, within and outside the video window. Ad sales opportunities include video ads, banner ads, text ads, sponsorships, placement in content, and branded content.

When calculating ROI for your online video initiatives, be sure to include revenue generated from the additional impressions made possible because of your video initiatives, even if the ad placement lies outside the video window.

Don't think about monetising your video; think about monetising your audience.

With your strategy set, it's time to make key tactical decisions about ad formats and placement, insertion policies and your targeting plan.

Unlike television where the 15- or 30-second commercial is the primary vehicle for advertisers, the web has no one-size-fits-all policy. The video ad format that yields the highest revenue for you largely depends on the type, length, and context of your video content.

The in-stream video ad is similar to a TV commercial that runs inside the video window in place of video content. The ad can be any length, but 15 and 30 seconds are most common.

In-stream video ads are often mistakenly referred to as pre-roll ads, but the term pre-roll really just describes when an ad occurs in relation to the video content. In-stream video ads can run before (pre-roll), during a break (mid-roll), or after (post-roll) video content is played.

In-stream video ads are popular because marketers are able to repurpose creative produced for TV. This unit works well for some content, particularly longer-form content and video traditionally viewed on TV.

Despite being thought of as too intrusive, it's currently the most effective video ad unit, with click rates ten times greater than standard banner units. In-stream video ads are most commonly sold on a CPM basis and are often accompanied by a companion unit.

While this format is appropriate for longer-form and professionally produced content, it has its challenges with shorter, snack-type content. As a result, new formats are emerging, such as the overlay.

The overlay is a branded rich media or text ad that appears in the lower third section of the video window while the video is running. An overlay doesn't delay video viewing because it plays in parallel with the video. The overlay is one of the most common examples of an in-parallel ad unit.

An overlay ad can play at any time during a video and several times within a video. It's common practice for the overlay to play within the first ten seconds of a video, and only once per video.

If you accept overlays, make sure they don't cover important content such as news tickers or sports scores that appear at the bottom of a video presentation.

Overlay ads are often appropriate for shorter-form content. Brand marketers prefer to run overlays on professionally produced content and typically purchase inventory on a CPM basis. Some user-generated content lends itself to the overlay, but advertisers often look for direct response and performance-based pricing on this type of content.

Companion ads can be graphical or text, and are located outside the video window. They can appear anywhere on the web page, and are not limited to just one unit. Companion ads often run in conjunction with an in-stream or overlay ad and typically remain visible after the video ad has ended.

Companion advertisements are another example of in-parallel placement, in which the ad runs while the video is playing, instead of interrupting the video.

Companion ads can be refreshed with new creative from the same or a different advertiser while the video plays. This lets a site extract maximum revenue while the video is playing.

Companion ads are appropriate for long-form, short-form, professionally produced, or user-generated content. They're typically priced on a CPM basis, but can also be based on click or conversion performance.

Takeover ads display over the full video player, letting an advertiser deliver an uncluttered, rich media experience. The takeover shows particular promise with full-screen, full-length, high-quality shows. It's associated with high brand recall and is already generating top industry rates for TV series that are broadcast online.

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