Pre-Roll Wins Out When Budgets Shrink

  |  August 12, 2008   |  Comments

Video ad firms say when times get tough, advertisers seek out tried-and-true formats, including pre-roll.

The pre-roll video ad format has taken its lumps from critics, but video ad firm BrightRoll CEO Tod Sacerdoti is among its chief defenders.

After all, about 50 percent of BrightRoll's business involves pre-roll. Sacerdoti says his company works with about two-thirds of the top 100 media properties on the Web.

What's the attraction with the ad format? Sacerdoti said advertisers are embracing pre-roll because it's a safe, tried-and-true product, especially when ad budgets are being squeezed.

Sacerdoti is now bragging these days about a client that's spending a million dollars on a pre-roll buy executed over one month on more than 30 branded sites. Catch is, BrightRoll declines to identify the advertiser.

"Due to the highly competitive nature of the online advertising industry, the client has requested anonymity," explained BrightRoll in announcing the deal.

The vendor said the campaign is the latest in a series of exclusively pre-roll campaigns it has completed for brands including The History Channel, Chili's Grill & Bar, National Geographic, Blackberry, Supercuts, and Land Rover.

According to Sacerdoti, BrightRoll had only one exclusively pre-roll project in the first quarter of the year. The number grew to four for the second quarter and is expected by Sacerdoti to grow to 10 by the end of September. That said, BrightRoll runs campaigns that include -- but are not limited to pre-roll -- so these numbers reflect only campaigns that are exclusively pre-roll.

"This signifies to us a little counter-intuitive trend: A return to pre-roll," he said. Pre-roll was the first online video ad format that "had any scale behind it" and it has always been the form on which advertisers spent most of their money, he said.

"It really never lost its popularity," Sacerdoti said. "There was a huge user backlash [against it]. Studies show it's effective, but there really was a negative connotation in the marketplace."

He acknowledged that pre-roll is one of the cheaper methods of online video advertising especially when the clips are just snippets of existing TV ads.

"The advertisers already have the creative asset," said Sacerdoti. "They can get more value out of something they already spent money on. A TV commercial can be leveraged."

Secondly, pre-roll is an "incredibly scalable" unit, coming second only, in that regard, to the venerable display ad. "The agencies' focus on what users want becomes less important when the resources are limited," said Sacerdoti.

"When you have a limited budget and you need strong impact you basically spend the money on what works, not necessarily on the latest, new, fun and user-friendly ad idea," he said.

Jason Glickman, CEO of online video ad network Tremor Media, agreed there's been a lot of talk about new forms of video ads that are going to supplant pre-roll. Few are gaining traction, he said.

"The most popular format is and always has been pre-roll," said Glickman. "There was a lot of hype around the overlay ad format."

But for all the "hype and press and blog posting," video overlays haven't taken the world by storm, Glickman said. "I've always maintained that if pre-roll is done right and the length is appropriate to the length of content it's in front of, and if it's targeted and frequency-capped, then pre-roll is by far the most effective," he said.

UPDATE: This story originally incorrectly stated that about 95 percent of BrightRoll's business involves pre-roll.

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