Prospecting for ad revenue in the video stream

Online video may be a conduit for reaching audiences in dynamic ways but challenges can arise when it comes to swaying advertisers to invest in the medium. Mobile devices such as tablets and smartphones offer marketers the chance to intimately target individuals who are on the go. Some viewers, however, may watch online video to reduce their exposure to product pitches. That can leave marketers and advertisers in a quandary as they try to reach this audience without turning them off.

During Wednesday’s sessions of the Streaming Media East 2011 conference in New York City, a panel of professionals from the online video sector convened to discuss monetization and video advertizing. Moderated by Jamison Tilsner, business development executive with online and mobile video research company Kantar Video, the panelists addressed  opportunities for growth as well as issues the industry faces.

David Kohl, executive vice president of sales and customer operations with music video website Vevo, said there is a tug-of-war over who should manage the advertising dollars put toward broadcast media and online video. “There’s definitely a battle on the agency side whether it should be the online groups or the television groups,” he said. Kohl expects the dilemma to continue over the coming 12 to 18 months.

Kohl said advertisers who traditionally bought ad time on television may be unfamiliar with the metrics and advantages of the online video market such as audience targeting, which tailors advertising to viewer demographics and watching habits.

Seth Brickman, senior business manager with Microsoft Corp.’s Bing Videos, said advertisers want to be sure online video is an appropriate method for reaching their customers. Brickman said the objective is to reach the audience without “hitting them over the head” while maintaining advertiser enthusiasm for the medium.

Matt Blasco, director of marketing analytics and insights with marketing communications agency Euro RSCG, said advertisers may need more information on how to leverage the online space as a point of contact with potential customers.

Ads in streaming video are capturing some audience attention. According to a report released in April by market intelligence firm comScore Inc., 174 million Internet users in the United States watched video online in March and viewed 4.3 billion streaming-video ads. Online video service Hulu, which features television shows and movies, generated the most video ad impressions in March with 1.2 billion.

Panel: Monetization and Video Advertising Formats

Robert Schneider, manager of global operations, Media Innovation Group; Matt Blasco, director of marketing analytics and insights, Euro RSCG; David Kohl, executive vice president of sales and customer operations, Vevo; Seth Brickman, senior business manager, Microsoft Corp.’s Bing Videos; and Jamison Tilsner, business development executive, Kantar Video

Robert Schneider, manager of global operations with digital marketing technology company Media Innovation Group, said scale can be a concern for advertisers in regards to online video. Advertisers that want their pitches to run with professionally developed, premium video content may have to compete for exposure. “Demand from what we see outstrips supply in premium categories,” Schneider said. However, some homegrown videos may also offer advertizing opportunities to reach customers. “There is a lot of [user-generated content] not being monetized as effectively as it could be,” he said.

Kohl said audience engagement comes down to the content. “When you as the user are selecting what to watch—whether it’s a Dave Matthews video or if someone watches a Justin Bieber or Lady Gaga video—you’re choosing it,” he said. The audience may be particularly drawn to ads that appear with videos they chose to view compared with what television broadcasters decide to air. “You’re more engaged in that message and the product because you’re paying attention,” he said.

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About Joao-Pierre S. Ruth
New York tech correspondent for Xconomy, tech writer for Investor Uprising, and aspiring urban fantasy writer. I also make brownies and crème brulee.

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