Online video is still on its way up. As mainstream content creators, such as television outlets, fine-tune their online distribution methods, viewership will increase and programming will be created with the Web in mind. Two recent examples show that online video is here to stay: the Olympics and this year's political campaigns.
Olympic sponsors drove 9.9 billion online impressions from ads, according to Nielsen Online. This represents a 30 percent increase over their usual Web traffic, documented three weeks before the Games. NBC alone served over 75 million video streams. This is quite an increase over the 2.2 million streams during the 2004 Athens Olympics.
On the political front, Paris Hilton's response to John McCain shows how online video has evolved. Hilton's response was posted and created exclusively for the Web, but TV broadcast outlets quickly referred to and used clips of the video in their political coverage. TV outlets are no longer the sole driving force of news content; online video aggregators are posting original, newsworthy content as well.
While there are examples of how online video is being adopted by the general public, there is still a fair amount of ground to be gained. A LiveRail survey (PDF) denotes that in 2008 online video advertising spending is only 2.4 percent of all online spending. It's a safe assumption that advertisers will invest more money in online video ventures; as TV viewers turn to online channels to watch programming, advertisers will follow and reap the tracking benefits that all online advertising forums provide.
Things are already changing. Two of the big online video companies, YuMe and Veoh, just launched behavioral targeting platforms to provide advertisers the ability to target ads on a national scale based on purchase intent and viewing preference. Since behavioral targeting has proven effective with other ad formats, marketers can use these developments to serve appropriate ads to their ideal user base. Providing contextual relevance, marketers will have the capacity to serve ads to a much more concentrated user base and increase the effectiveness of their entire campaigns. This is especially true if behavioral targeting is used in conjunction with geographic or demographic targeting techniques.
Quality Over Quantity
Behaviorally targeting video advertisements will also allow marketers to be increasingly selective in whom they serve ads to. This will hopefully elevate the quality of ads that users see online; in theory, marketing messages will pertain to user history and preferences. While not a perfect science, behavioral targeting will also help advertisers make a bigger impact with users by serving applicable messages to interested users.
Agreement Among Aggregators
However, one missing step is the agreement between aggregators and advertisers about how to differentiate between and categorize video content, specifically with tags. Right now, inconsistency exists between which terms publishers, advertisers, and users choose to tag their videos with. Let's say I'm an advertiser who wants to target videos with "social networking" as a tag. Would my advertisement be served on a YouTube video tagged with Twitter or MySpace tags? Possibly not.
If marketers can't accurately serve ads along side relevant video content, targeting won't be too effective. An easy way to sidestep this problem is to have a finite list of tags that users and aggregators can use to describe their content. This way, when advertisers plan their online video campaigns, they can be sure they will have access to all relevant content.
Behavioral targeting is effective from a marketing perspective, but users tend to be squeamish when their information is being collected and used by advertisers. On the flipside, users are easily annoyed by irrelevant advertisements. As online users grow more accustomed to watching video content online, they'll come to favor online video advertisements over their TV counterparts. Since advertising is here to stay, I'd rather messaging pertain to my individual preferences and behavior.
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An online advertising veteran for over 12 years, Roell was a cofounder and chief Web strategist for Prime Player, the Internet's first portal for sports participation. He earned his MBA from the University of San Diego, graduating magna cum laude. He earned a bachelor's degree in international business from the University of Nevada, Las Vegas, which recruited the professional soccer player from his native Karlsruhe, Germany, to play for the UNLV Rebels.
Roell sits on Interactive Advertising Bureau's online lead generation board and is a frequent industry expert with such media outlets as Fox News and NBC. He's an active angel investor and frequently functions as advisor to early-stage technology companies. He is president of the San Diego Advertising Federation and was named one of San Diego's Top 40 Entrepreneurs Under 40.
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