Video advertisements, such as those created with MSN video, are the future of online advertising. The video advantages point to a strong future with the medium in the advertising world. In fact, online video advertising is projected to grow at an astonishing rate!

What is Video Advertising?
Online video advertising is popping up all over the Internet. As more and more people are becoming connected to the Internet via broadband connections, the disadvantages of slow load speeds are no longer a major concern with online advertisers.

Video advertising is marketing that incorporates streaming video. Streaming banners are an example of video advertising. With this type of ad, the video is confined within the boundaries of the banner ad, which is excellent because it can run without hindering the user from viewing the remainder of the website. Streaming video in the body of an email is another popular form of video ad.

What do video ads usually contain? Think of it like a miniature TV commercial. It might include a demonstration of a product, a testimonial about its effectiveness, or employ a clever "movie plot" to achieve better "branding" or recognition for the items or services in question.

While this is a newer venue of online advertising, it is growing steadily. Statistics project that the amount of money spent on online video ads will reach $657 million by the year 2009. The growth stems from the growing popularity of broadband connections. The disadvantages of online ads used to be that they significantly slowed load speed for users on a dial-up connection. As dial-up eventually phases out, this will no longer be a concern.

Video Advertising: A Performance Medium by Any Measure

Posted April 8th, 2008 by Bill Todd

Video advertising is not just about pricing pre-rolls or overlays, inventory accessibility, sales lead cycles or debate over when critical mass of advertiser uptake will occur. Video advertising is about performance, whether an advertiser measures it by awareness, traffic or converting site visitors to sales or leads.

The emergence of elaborated companion banners, animated overlays, repurposed text or product feeds and the ability to run non-video creative are just a few of the more recent innovations that should convince any remaining skeptics about the benefits of video advertising online. Whatever the format, media placement or product features of a particular publisher or network, campaigns should always be supported by an intense focus on performance, which is driven by three key factors: campaign execution, traffic quality and technology.

Campaign execution: create dynamic creatives.  While television offers established ways to monitor performance, the measurement capabilities provided in the online world are even greater. Television advertisers focus on branding during the day and direct response late at night, but only online can offer both to reduce the overall cost of customer acquisition. Instead of the old adage "repeat the message as often as you can, for as long as you can afford to do so," advertisers who embrace online video ad creative should now be striving to "get that click in less than 10 seconds!"  

Technology: behavioral, contextual, phenomenal. Video is expensive, so it better perform. And there is plenty of technology to support advertisers' performance objectives. High CPMs justified by delivering high performance is one thing. Delivering high performance to justify high CPMs is another thing. Advertising in video content would be simple if it was just about leveraging one's display advertising experience. In reality, campaign delivery is more complicated, and technology will make the difference. The timing and sequencing of how ads are displayed in a video player window can be tricky, but is not insurmountable. Leadership expertise will come from granular targeting capabilities. Think about behavioral targeting applied to pre-rolls. Think about contextual targeting applied to product placement. It's all possible today.

Targeting and campaign delivery are available not only at the publisher or the page level, but also at the video content level. Behavioral and contextual targeting are a new El Dorado for television buyers because profiles are based on consumers' real activities, not rating points. Campaign performance is accountable, trackable and immediate, making video advertising a very innovative, yet mature solution for traditional and online advertisers. And that's phenomenal.

Online Video Ad Spending was predicted to TRIPLE
Study Predicts Spending Away From TV

In 2007, the researchers expected the dollars committed to online video ads to climb to $640 million from the $225 million spent in 2005. This prediction was met and exceeded. By the end of the decade, advertisers will spend at least $1.5 billion on video ads online.

Clambering to get online:
Marketers are clambering to get their messages into video ads. Some of the most memorable Web ads used video in a way that worked particularly well in the medium: Burger King's Subservient Chicken, Jeep's Webisodes and Volkswagen's short films for its Passat brand.

Diverting money from TV:
Most significantly, the report said, is that all of that growth represents money that would have been spent on traditional TV. The central reason for this growth is that consumer broadband hookups have become nearly as commonplace as any other utility. By 2008, 84% of online households and 56% of total households will have broadband.

As important, video ad growth is at a tipping point. Television and the Internet will find ways to complement each other; winner-take-all is not the name of the game. Also for traditional agencies accustomed to TV, online video makes the Internet more familiar. Whether it's a repurposed commercial, extra footage, original advertising made just for online, it is still familiar.

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