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Crack for Marketers

  |  February 2, 2004   |  Comments

Marketers: Now you can satisfy your TV addiction online. And that's a good thing.

Outside a trendy Manhattan club, I saw something both amazing and absurd. A silver van painted with Red Bull logos was parked on the street. It was silently playing 30-second commercials through a window in the back.

As oblivious club kids streamed past the van without noticing it, hurrying to find taxis in the cold, I stopped and stared. I was impressed by the effort Red Bull had made to track down its target audience. More than that, I was struck at the length to which the company had gone to show its TV spots.

Red Bull's not the only company addicted to its commercials. Nextel and others are advertising on Clear Channel's new video billboards, which run silent TV spots on large, low-resolution screens above subway entrances. Advertisers such as Atari are buying space inside the AOL Instant Messenger buddy list, playing miniature video spots for users who are more likely chatting than watching the commercial. Meanwhile, thousands of marketers continue to pay TV networks inflated prices for dwindling audiences.

TV commercials are powerful advertising tools. Video and audio combine to provide a richness other ad formats are hard-pressed to match. But TV commercials also hold remarkable power over the advertisers themselves. Thirty-second spots are powerful and addictive. They're like crack for marketers.

So I was disappointed to hear so much dissent when Unicast introduced its Video Commercial on January 20. The video commercial is a large, full-motion video interstitial. But rather than embrace a format that gives marketers what they're so clearly willing to pay for, many of our industry's thought leaders quietly grumbled "forcing" TV spots online is a bad idea. They complain the idea lacks creativity and compare it to TV anchors reading radio ads into the camera in the 1950s.

I agree there are some valid concerns about the video commercial. We've yet to see how users respond to these ads. I wish advertisers could be talked into running 15-second spots, rather than 30s. Unicast made a mistake launching the format without first completing an ad-effectiveness study. But the picture quality is good, ad size is impressive, and video interstitials make a lot more sense than video banners or video floating ads offered elsewhere.

Most important, this format answers marketers' most common objection to online video ads: It provides massive reach. Yahoo, ESPN.com, and MSN have generated tremendous interest offering in-stream video ads, in which commercials are run within online video content. In-stream video ads are one of the best advertising opportunities available online. But with 38 percent of marketers concerned video ads don't offer enough reach, in-stream ads alone just aren't enough.

By bundling in-stream ads with video commercials, sites can offer advertisers tremendous reach with high-quality video spots. Today, Yahoo LAUNCH offers in-stream advertisers a reach of fewer than 10 million users. If it adds video commercials to the mix, Yahoo can offer those same advertisers a reach of nearly 60 million users. That's a pitch Yahoo would no doubt like to make, and a pitch many large advertisers are waiting to hear.

Jupiter Research expects two thirds of marketers to buy online video ads this year. Advertisers want to run their TV spots on the Web. Rather than fight this, I encourage sites to go after the money. Combining the effectiveness of in-stream video ads with the reach of video commercials is a good place to start.

Meet Nate at Search Engine Strategies in New York, March 1-4.

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ABOUT THE AUTHOR

Nate Elliott Nate Elliott covers online advertising as an associate analyst for Jupiter Research. He is regularly cited in the media as an expert on rich media, search marketing, and ad serving technology. Prior to joining Jupiter, Nate was DoubleClick's Senior Manager for Rich Media and manager of the DoubleClick Studio design team, roles in which he worked with clients such as AT&T, Kraft, General Motors and IBM. Nate founded and co-chaired the IAB Rich Media Task Force, the group that set the first industry standards for rich media advertising. He has also worked for Macromedia, driving the Flash Multi-Tracking Kit as de facto industry standards for tracking clickthroughs and other interactions within Flash ads. He isregularly cited in the New York Times, the Wall Street Journal and elsewhereas an industry expert.

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