Questions for Unicast's Dick Hopple

There’s no question online video formats are hitting the marketplace with greater regularity than ever before. The two most notable recent additions to the interactive video mix come from MSN and Unicast, which last month unveiled its Video Commercial unit. The latter format supports broadcast-quality video ads in the company’s patented between-page delivery method.

Perhaps as striking as the new products’ appearance is the attention they have received from pundits and mainstream media outlets. The New York Times last month ran an enthusiastic piece about Unicast’s offering, and similar upbeat stories have turned up all over the place, from Singapore’s Straits Times to the Belfast Telegraph, to syndication on United Press International.

Are the products worthy of their hype? ClickZ recently tracked down Unicast CEO Dick Hopple to answer a few questions about the company’s new format, its odds of success with the Web’s often-fickle rich media players (both on the buy and sell side), and the company’s health in the wake of DoubleClick‘s launch of its Motif rich media product.

1. The video commercial format has generated a lot of buzz. Will the market live up to journalists’ hype?

   Based on advertiser and publisher feedback to date, I am fully confident the Video Commercial will not only live up to, but also exceed expectations.

   The Internet gets about six percent of total ad spending in the U.S., but top 50 advertisers spend less than two percent of their advertising budgets online. What the Video commercial does is let these advertisers use the asset they value most with no compromise in quality to reach a whole new audience segment.

   That means that it: one, opens up an entirely new distribution channel for the kind of advertising they have used effectively for 40 years; two, allows them to reach the high quality Internet audience at a time when television viewing is at the lowest point in the past decade; three, can be combined with interactivity to take advantage of the unique capabilities of the medium; and four, lets their agencies use the same video toolset they have always deemed most effective.

   For publishers, it means they can compete head-to-head with television because the quality and effectiveness of the advertising itself is comparable. As a result, advertisers are able to make media decisions based solely on audience composition and targeting, where the Internet has a significant advantage.

2. What are the obstacles to marketer success with the video medium? What other factors do you see influencing uptake in this category?

   I think there are two issues: one that will take care of itself and one that the Internet publishing industry controls.

   First is the purchase cycle. I believe it will take a quarter or two for advertiser purchase cycles to align themselves with the availability of this new distribution channel for their primary advertising investment.

   Second is publisher perception of consumer reaction to this new format. Publishers need to be assured that first, consumers will accept this kind of advertising with the same level of acceptance they have in other media, and second, consumers’ site loyalty will not be influenced by this kind of advertising.

   The advertisers participating in the Video Commercial launch are conducting research designed to clearly and definitively assess user attitudes about these kinds of ads. The initial data supports that publishers will be reassured.

3. Is video advertising adoption going to be a race or a marathon, do you think?

   I think it will be a little of both. While I think there is extraordinary amount of pent up demand based on conversations with advertisers and agencies, major advertisers don’t move quickly when they are making decisions about changes in the way they have deployed their budgets for the past 40 years. On the other hand, those advertisers and the agencies that represent them are angry at the price increases on network television over the past year.

   The Video Commercial provides them with a real alternative to television because they can deliver broadcast-quality ads to a highly valuable audience that is clearly on par with television.

   Unlike banners for example, there is a finite amount of inventory for the Video Commercial. Advertisers that are able to move quickly will have a significant price advantage in the market, and from what we have seen, we expect initial inventory to be absorbed relatively soon.

4. How has your relationship to your customers changed with the introduction of Motif?

   Not at all. We haven’t noticed any impact on our customer relationships as a result of the Motif introduction, perhaps because the majority of our customers anchor their online campaigns with our top tier products — the Superstitial and the Video Commercial.

   DoubleClick is well aware of our interstitial patents that cover the method required to play advertising transitionally or between pages, which is the way large-file, broadcast-quality ads have to play.