Online video advertising

It was no real surprise that this was coming, but it’s still interesting to see how every video service is trying out different kinds of advertising on and around their videos. I honestly expected it to happen earlier as we all know the daily costs for services such as Youtube are quite high and there’s little monetization just yet.

The solution that most services seem to bet on is the advertising pre-roll: showing a short ad before you see the video you actually chose/came for. Also here are some differences as some have a pre-roll for every video while on MSN Video for instance this is based on time spent on the site. So regardless of how many videos you watch, you’ll only get a pre-roll every 3 minutes. It’s interesting to see how ads are not tied to pageviews anymore although also this model will continue to improve. (disclaimer: I work for Microsoft)

Another solution is the advertising that shows as a partial overlay on the video. VideoEgg has this for a while now and it is also what Youtube introduced on their service not so long ago. After user complaints they made this an opt in for content owners since many weren’t happy at all. It would be interesting to find out how many content owners opted in for this.

And since online video is so popular, it attracts other types of advertising especially when people share videos. Google just introduced their Adsense Video Units which is basically a way of embedding video into your site/blog with ads surrounding it. People who do embed this can make a bit of money (similar to AdSense) but they could have done with a little bit less ads I think.

A last type of advertising with video that I found just recently is the Wildfire Network. It’s less related to advertising before and during online video, but I thought it’s still somehow part of this discussion. Basically it’ll pay bloggers to post videos on their blog, and it’ll show it’s a sponsored entry. Pay-per-post for video basically and I guess the whole pay-per-post discussion applies here as well.

Anyway, will any/more of these solutions attract advertisers? I guess we’ll have to wait and see. I remember back in 2001 or 2002 (I still worked at Kinepolis Group, which is a cinema operator) we changed all online movie trailers from Quicktime to Flash (which back then was hardly used for video). At the same time we introduced the possibility of adding a 7 second commercial before each movie trailer and I always found it weird we were never able to sell that to anyone. And cinema advertising was big part of our business remember. Curious to see if that changed today, 5-6 years later.

Wait and see.

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