Arguing that online video needs the equivalent of the 30-second spot that drives the bulk of TV ad spending, Vivaki executives went to the IAB Ecosystem 2.0 summit in Carlsbad, CA to encourage the digital marketing industry to rally behind a single model that can drive the bulk of online video advertising going forward.
Vivaki and its partners in The Pool - the industry coalition consisting of interactive agencies, brands and online publishers charged with finding the right ad model - earlier this month announced the winning format, the Ad Selector pioneered by Hulu. Ad Selector is essentially pre-roll with benefits, allowing consumers to choose from up to three different ads to view before they're given access to the video they came to a site to watch.
But Vivaki Senior VP/video innovation director Tracey Scheppach and Vivaki Nerve Center President Curt Hecht used the conference to both explain the methodology and extensive research that went into the process of selecting the winner, while also stressing that importance of making it an open format and generating widespread support.
That research included more than 230,000 hours spent with more than 25 million consumers, and Ad Selector ended up besting 29 other formats in a multi-stage process including interactive, transitional skin, clickable video and embedded video. Ad Selector already has the support of the other Pool members, including AllState, CapitalOne, and Applebee's, as well as online publishers AOL, CBS Interactive, and Discovery Communications. Scheppach said Vivaki is already eyeing some international initiatives.
During their presentation, Scheppach also reiterated many of the positive aspects of the Ad Selector, including the consumer belief it gives them more choice and is more respectful of their time. She also noted Ad Selector had dramatically higher click-through and recall rates than traditional pre-roll.
But she noted that even within the Ad Selector model, consumers want more choice, citing as an example that consumers were less responsive when given a choice of viewing three different ads for General Motors cars than if given a choice between three distinct brands in three different product categories.
The Pool found other Ad Selector best practices included giving the consumer at least 10 seconds, but no more that 15 seconds to choose an ad before one is chosen for them, to limit the ad choices to either two or three and to employ frequency capping.
In an interview following the presentation, Scheppach said The Pool considered also selecting a second and third place video ad model, but said, "We wanted to end with one. It's not that we're saying the other ones are bad, it's rather we're saying we have to get one big workhorse that can sustain spending."
Scheppach suggested the online video ad industry is currently plagued by two challenges. The first is that while 30 percent of TV content is now available online, it is suffering from a very specific problem of not being monetized the same way as television. She cited NBC Universal CEO Jeff Zucker, who famously said, "I'm trading analog dollars for digital dimes." The second is what Scheppach described as "ad model chaos," the sheer number of players now in the marketplace.
Hecht suggested The Pool's focus on the Ad Selector model won't be enough in itself to solve those challenges, nor does he expect other formats, including pre-roll, to go away anytime soon.
"Pre-roll will continue to remain in the marketplace - it's been around for a long time and it's easy to do," he said. "But our point of view is the research lets us know why (Ad Selector) is the right format. Advertisers are currently spending $600 to $700 million behind online video advertising without knowing if that's the right thing for consumers. Most standards are driven by how much revenue is behind it, but this one is driven by how much consumer sentiment is behind it."
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David Ward is a veteran freelance journalist based in San Diego, who currently focuses on online marketing, digital entertainment and the growth on new consumer technologies such as 3D in the home.
March 19, 2014