Old World Agencies Hold Key to New World Ad Formats

For all the challenges and opportunities facing the digital media industry in the next year, the one issue likely to avoid the quicksand of metric jargon and subsequently score a quick win is the standardisation of video advertising, or at the very least, solidarity amongst publishers around the goal of securing a greater percentage share of television advertising budgets.

In other words, makig sure any TV advertising campaign is accompanied by an online media buy, where there are certain economies to be achieved using the same (or similar) material.

This rather innocuous ambition carries enormous implications for television advertising, and every dependent or associated business, whether broadcaster, advertiser or agency. In short, the goal (and premium positioning) of online video advertising is to mesh the impact of television advertising with a cost-effective platform for reaching both portal-sized and niche, almost exclusive audiences (read $US20 CPM).

While industry players harp on about the pro and cons of pre-roll versus ticker, or watermark versus dynamic, real-time placement (similar to Hiro technology), the premise that online video ads are highly impactful, both in terms of generating awareness and developing association, is now indisputable.

How then is it that most forecasts suggest that by 2011, online video advertising will represent just 10% of total online adspend? The lack of inventory is one explaination, given that YouTube is assiduously avoiding the use of advertising on copyrighted materials. Yet, equally it is the cautious nature of many traditional agencies and clients to embrace online video which is also dampening down industry forecasts.

Interestingly, a recent survey of US advertising agencies indicated that the key reasons why agencies were not fully committed to online video were:

1) Lack of standardised formats;

2) Content quality;

3) Cost, difficulty to implement;

4) Branding opportunities;

5) The format was still too new to determine overall effectiveness.

It’s an interesting response given their wholesale, unequivocal support of the effectiveness of television advertising!

Importantly, it s the larger agencies, or those most tied to the TVC format, which have both the client base and technical expertise (from the perspective of video production) to drive online video ads to a critical mass. For example, for agencies employing between 1 and 20 people, only 18% had used online video ads in more than seven campaigns to date, copared with 57% fo agencies employing greater than 100 employees.

In terms of video ad formats, 71% of the larger agencies (>100 employees) preferred pre-rolls, versus 50% for the smaller groups, who incidently, overwhelmingly favoured the ‘opt-in’ format (60%), versus just 29% of the larger agencies.

For all the bluster about industry growth, digital media is still not firing on all cylinders. To fulfil this potential in the medium term requires the transition of the TVC (or something equivalent) to the digital space as an almost automatic augmentation to any relevant above-the-line media strategy.

Online video ads offer an impact unmatched by any online ad format seen to date, yet ironically the gatekeepers to this source of material remain, by-and-large, the traditional full-service agencies with a legion of troops experienced in the television format.