US company Maven networks has had a long hard road to try to take advantage of video over the internet ‘ every time it has a product stake in the ground it seems like the goalposts move further away ‘ but this week it has captured the hearts and minds of some of the great and the good in online services behind its idea to create a video advertising group it is calling the Internet TV Advertising Forum (ITAF).
It’s not a big surprise that Fox is among the first members, as it is a long standing Maven customer, but add to that Scripps Networks, both the Ogilvy and Digitas advertising and brand creation agencies, ad serving empires 24/7 Real Media and DoubleClick, bought recently by Google, and Microsoft and you have the core of the world’s mega brands in the online ad market.
There’s only one key element that seems to be missing and that’s Adobe, which controls over 50% of the internet’s video through its FLV flash video format.
The ITAF reckons that it will set standards for next generation online video advertising formats, strategies and pricing, all of which is long overdue. Video advertising on the internet has long needed a rethink in much the same way that TV advertising does.
TV is based on interruptive advertising, which in the US has non-program content eating around 40% of viewing time and 30% of viewing time (around 18 minutes per hour) delivered as advertising. But because this is a $60 billion business, every network is terrified of changing the rules, in case it suddenly loses a small share of that business.
The ITAF would also have to develop tools to facilitate new advertising types and demonstrate to advertising audiences that a new system works. Things are very different on the internet, as it tries to come to grips with video advertising lifted straight from the TV screen, onto the internet.
US research conducted by PricewaterhouseCoopers for the IAB (Internet Advertising Bureau) shows that broadband video advertising remains tiny at 1% or $100 million in the US. In a global market of round $407 billion for advertising last year, with a little under half of that spent in the US, and over 40% of that US spending aimed at TV advertising, we have hardly scratched the surface and advertising clearly cannot be lifted directly from TV habits.
Maven is putting forward ideas not dissimilar to those espoused by Adobe and Google, both of which have products out that show advertising accompanying video on the internet to be non-interruptive and to include both video and static overlays, which are interactive.
That $100 million has virtually all been generated by pre-roll video, a form of interruptive video which runs before you can watch the video you are really after, and Maven argues that it’s time to try something different.
Maven says that the aim of the Forum is to develop and standardize effective online video advertising which is engaging but at the same time offers appealing user experiences, and a way to scale. One of the big problems with pre-roll is that it puts off a lot of viewers before they have even begun watching, and if you can only advertise for 30 seconds before a video, it means that the advertising ratio in a 1 hour film is just half a minute out of 60, less than 1% compared to TV’s 30%. The result is that there is hardly any inventory. This is a genuine problem holding back video advertising on the internet.
Not only does someone need to come up with video class advertising that can benefit from the work that is carried out for TV, but it needs to be watch-able and non-interruptive in nature, but at the same time it needs to be measurable by networks like Doubleclick, and must not be possible to cheat with (telling agencies that more people watched it than really did).
On the innovation side we need to see strategies emerging to calculate when the engagement with a viewer is sufficient that interruption won’t stop him or her from continuing with the video, or where there is no interruption, for instance ‘click here’ buttons appearing sporadically, as moving images over the top of the video, which if not triggered throughout the life of the video, trigger just before the finale.
Maven timed the announcement of the new Forum with the launch of a system to facilitate all of these approaches and more. Its new ad platform uses a new ad insertion approach which it has applied for patents on, which automatically decides the optimal ad viewing points within a video clip based upon historical viewing habits when viewing the clip and the video’s popularity, as well as associated metadata such as video length, and subject matter.
The idea is to use this system to create more inventory within the body of the video rather than at the front end. It can also allow for manually placed ad insertion points.
The whole approach is new as far as we can tell, although this idea of adverts hovering over video is shared with quite a few other organizations. We would expect to see other moves such as feeding dialogue content into search engines to identify video advertising that is relevant and then marking it for viewing throughout the video. All of this needs to be part and parcel of an addressable advertising approach, where demographics and previous internet activity are used to pick relevant video adverts.
Maven reckons that the result will be an exponential increase in ad inventory within both short and long-form video, with a resulting surge in its popularity and the volumes of revenues associated with it. Who’s to say that then the same type of advertising insertion cannot be used on pay TV, especially where it has a return path such as on IPTV or cable TV.
The aim is for these Forum members to conduct some comprehensive research and usability testing of new ad formats and prove their worth for advertisers and then promote the outcome as new standard forms. The results of this research project will be made public by the end of 2007
‘We are seeing incredible pent-up demand for online video advertising, not just the pre-roll model, but also for a new, more effective model,’ said Jeff Meyer, SVP of Interactive Sales for Scripps Networks. ‘Scripps Networks has taken a lead role in innovating advertising online and on-air, and the Forum collaboration will instantly provide a more deeply engaging consumer and advertiser experience across all of our category-leading online lifestyle properties.’
Maven began life simply wanting to facilitate video delivery over the internet, and then took $12 million in a third round of VC funding last Summer to develop this new metaphor for advertising, bringing total VC funding to around $27 million.