Video Essentials

What Sells in Online Video Advertising

What does it take to make money from online video advertising these days? That was the topic of a second-day panel at the Streaming Media West conference, which concluded yesterday in Los Angeles. Four panelists with experience that goes way beyond pre-rolls met to discuss what advertising formats are getting results.

Two main areas seemed to drive the discussion: the rise of social networking and the necessity of creating immersive ad packages for advertisers.

“How users are consuming content is changing rapidly because of social media, and you just have to be there,” said Mark Marvel, the senior director of video monetization for Viewers, especially younger ones, are now used to embedding videos on their Facebook pages or other sites. That presents a challenge for advertisers.

The young don’t care where they get content, as long as it’s free, asserted Chris Ficarra, the senior vice president of marketing for MTV Networks. Ads need to be able to travel with videos, he said.

Many on the panel had experience creating online video ad packages that delivered a more immersive experience for the viewer, garnering better response rates for advertisers. Ficarra spoke about creating packages around MTV events such as the music video awards, which offered unique elements including exclusive content, a backstage look, polls, and chat.

“By creating these lean-forward experiences for our fans, we can bring our partners into that,” said Ficarra. He added that MTV Networks was always testing out new models and that the company was able to charge a premium for delivering immersive experiences.

The panelists also agreed that no one model works for every site. Pre-roll, viewed as the most effective video advertising, can burn out if the same ad is used repeatedly. Marvel said that it was often more successful to use a series of ads sequentially, to avoid playing the same one over and over, or to combine pre-roll with another type of advertising.

For long form content especially, Brad Murphy, the chief revenue officer for Revision3, said that it was smarter to optimize the advertising for the viewing experience—the device being used and  the screen size—than for the type of content.

As no one model is dominating the online video advertising market, Ketan Babaria, the senior product manager for PayPal, advocated testing different solutions. “Publishers need to find what works best for their customers,” he said.

Babaria mentioned offering subscriptions or one-time payments as possible monetization options, something that PayPal enables, and recommended making the purchase procedure as simple as possible. He also suggested continuing testing even after deciding on a monetization approach, as trends can change.

The panelists agreed on the need for advertising standardization, something that will help the still young industry grow and compete for advertising dollars with television.


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