Online video advertising has reached the buzz stratosphere. What are agencies' experience with it, and what is the state and future of it?
I'm feeling quite bombarded these days with daily news about online video advertising. I think it's safe to say the topic has reached the buzz stratosphere blogging hit last year.
I decided to analyze online video advertising from a different angle: agency experience with and thoughts about the state and future of online video advertising. I set up an informal survey of about 100 agency peers and simultaneously interviewed the companies providing us with the platforms to create and serve online video advertising. I think you'll find the results interesting.
More Talk Than Action
Self-proclaimed online video advertising experts are limited. A bit more than a third of the respondents claim to be "extremely experienced," with about half claiming "moderately experienced" and just 3 percent claiming to have "little to no experience." Those with little experience were then excluded from the survey.
Solution providers estimated the same agency response. They also predict all the hype will only lead to more interested agencies gaining experience.
Planning and Production
Currently, 10 percent of respondents have less than 10 percent of their media budgets allocated to online video advertising. Ten to twenty percent of a budget seems to be the range most (80 percent) respondents have allocated at this time.
In producing online video ads, though, the majority of experienced respondents know about the IAB's Broadband Video Commercial Measurement Guidelines (PDF file), which were updated last month; 65 percent of respondents admit to not knowing them thoroughly. Nevertheless, 47 percent of respondents say they follow these guidelines 80 percent of the time or more, while 10 percent say they follow the guidelines less than 50 percent of the time or not at all.
Supply and Demand
Aside from an obvious concern about available inventory (53 percent are "somewhat concerned"), there's a strong desire among agencies for more video ad features. For the timeframe in which respondents were likely to regularly use each of the following features (which represent all the features I asked about), the majority of the respondents answered, "Right now if it were more readily available":
Such is the perceived demand for online video advertising that few respondents felt they would wait more than a year to use these features.
Eric Eller from Advertising.com adds that agencies really want more ability to behaviorally target pre-roll video ads.
Respondents also want to see more availability of surrounding advertising ad packages (clickable banners or text ads next to the video), so they could consider purchasing them in the mix.
Concerns About Online Video Ad Buying
With the pressure for everyone in advertising to get in the online video advertising game, agency concerns are varied, but most everyone has concerns. The top concern expressed by respondents is how to keep consumers engaged with the ad, with 61 percent of respondents saying they're very concerned with this issue. Other areas of top concern include creating unique content rather than repurposing TV ads (48 percent); tracking and measuring online video ads (48 percent); providing proof of delivery to clients (43 percent); and unrealistic client expectations (35 percent).
Respondents are somewhat concerned with issues like publisher availability/sourcing placements (57 percent); video ad content optimization (57 percent); ad sizing for multiple placements (53 percent); indexing/classification of video ad content, frequency capping, and optimal length of video (all 43 percent); and production costs (40 percent).
The only non-issue among respondents was connectivity. Fifty-seven percent of respondents say they're not really concerned about consumer broadband or connectivity.
Other thoughts, concerns, predictions about the current or future state of online video ads? "Until CPMs come down, it is still hard to justify against a cable buy," wrote one respondent. Another expressed concern about publishers pushing advertisers to buy video ads without readily accepting third-party ad serving or providing accountability.
Solution providers correctly predicted most of the agencies' concerns. Agencies also regularly ask about inventory availability, the type and length of video supported, reporting options, technical specs, and production how-tos. Ari Bluman of 24/7 Real Media thinks agencies are particularly concerned about advertisers being properly educated. Larry Allen of Tacoda believes agencies are also very concerned about the quality and originality of video advertising they're associated with.
From my survey, it seems everyone involved in online advertising is trying to keep pace with the breakneck speed of news about online video advertising. Right now, there's a definite gap as a result.
Full survey results can be viewed here.
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