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In-Stream Advertising: Killing or Saving Online Video?

  |  January 25, 2008   |  Comments

A new Burst Media study tries to make sense of it all.

No one can deny the strong revenue potential for online video. However, there are many schools of thought on how that revenue potential can be realized. Publishers and advertisers alike hope that realization happens soon.

Most consumers probably feel differently.

A new study from Burst Media says that consumers are turned off by in-stream ads, such as pre-roll. While advertisers and publishers don't want to hear this, the study raises many issues that might make you question the study's validity, second-guess its naysayers, and even determine whether or not you should take action to address its findings.

Ad vs. Brand Recall

The study of 2,600 respondents found that more than half (53.6 percent) of all respondents actually remembered that they'd seen ads. But do they remember what the ads were for? Ads, especially those in the form of a traditional TV spot, are hard to avoid, but easy to ignore.

You'll remember it when an ad interrupts an online experience, such as watching an online video. The number of people who remembered seeing ads doesn't surprise me.

Of those people who remembered seeing ads, how many recall what the ads were for? That would be a key piece of learning to take away from this study, but alas, that statistic is nowhere to be found.

Video, Interrupted

A total of 78 percent of respondents said in-stream ads were intrusive and 50 percent said those ads disrupted their viewing experience.

Well, yes. Ads interrupt. That's their job. No news here.

Ads and the Effect on the Viewing Experience

One in two respondents said they stopped watching a video once they encountered an in-stream ad. And, 43 percent stuck around to watch the content.

But here's something interesting. Those ages 18 to 24 were actually the most tolerant of in-stream ads: 57 percent watched content past an ad. This demographic represents the generation of on-demand, P2P, I-want-it-now, media consumption.

To me, this actually holds promise for the online video business, and gives me a glass half-full feeling about online video's ad-supported future. While many bloggers and pundits zeroed in on the 15 percent of the people who abandoned Web sites after seeing an in-stream ad, we should instead focus on those who stuck around.

If the 18- to 24-year-old age group stats haven't surprised you, here's another one: 38.5 percent pay more attention to in-stream video ads than they do to standard ads.

So, while the study has provided plenty of fodder for critics of the online video industry, it gives us quite a bit to be optimistic about. If 18- to 24-year-olds are our future, then online video advertising's future actually looks pretty bright.

Til then, it'd just be nice to have more studies that are more thorough to learn more from.

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ABOUT THE AUTHOR

Ian Schafer

Ian Schafer, CEO and founder of Deep Focus, consistently redefines the way entertainment properties are marketed online. Ian founded Deep Focus in 2002 to bring a holistic suite of interactive marketing and promotional solutions to the entertainment industry. The company's clients include America Online, Dimension Films, HBO, MGM, Nickelodeon, Sony/BMG Music, 20th Century Fox, Universal Music Group, and many others. As former VP of New Media at Miramax and Dimension Films, Ian was responsible for their most popular online campaigns. He's been featured as an expert in online entertainment marketing and advertising in numerous media outlets including Variety, The Hollywood Reporter, Advertising Age, and CNN.

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