The State of Pre-Roll Advertising

Earlier this week, Google announced that it would start running "overlay ads" on some of its YouTube video content. Overlays are an ad format that essentially provide a clickable layer of ad creative on top of a portion of the real estate of a video player screen. While there is some debate over the origins the format, it's clear that the ad product innovation is gaining momentum and adoption among broadband video publishers and advertisers. Google's announcement will undoubtedly drive broader acceptance of the ad format in the quest for less obtrusive advertising with higher conversion rates. But does this development signal the twilight of pre-roll advertising?

Not anytime soon. Pre-rolls are working, despite the many shortcomings they embody from an end user perspective. They provide a very easy way for traditional advertisers to get in the broadband game, while at the same time giving publishers the ability to capture premium ad dollars. Several developments advocated by industry leaders are helping to alleviate some of the problems associated with pre-roll implementation, such as time-based rotations for ad insertions. That said, formats like overlays will continue to gain steam and adoption, providing exciting new opportunities for marketers to engage with targeted online communities.

Earlier this week, I was asked by Shoot Magazine to contribute to a round up article on the state of pre-roll advertising. Here's my take:

Over the past several years, the dominant 15 to 30 second pre-rolls with companion banners have provided an easy on-ramp for brand marketers to expand the reach of ad campaigns through broadband media distribution. However, this format has a number of shortcomings. Insufficient inventory has resulted in "creative fatigue." Media buyers often snatch up all the available inventory on a video site or channel for entire 60 day runs where the same ad creative shows up every other clip. As consumers sample, or "snack," from clips on these sites, saturated ad rotations can result in brand overexposure and audience attrition. Another problem is that the economics of pre-roll advertising are ill-suited for increasingly popular mid to long-form content, such as broadcast and primetime network programming.

Brightcove has responded by developing policy solutions and innovative ad formats that address these shortcomings. For example, implementing time-based ad insertions versus pre-rolls on every other clip avoids the problem of creative fatigue. Here, end-users only receive an ad unit after watching a certain number of minutes of video content, regardless of how many separate clips they access. It will also become increasingly important for buyers to agree to provide multiple ad creatives with their campaigns to ensure a fresh rotation of advertising against broadband inventory. In some cases, programmers should also provide "carve outs" of their inventory for ad networks to place additional rotations of advertising within their broadband content.

Brightcove is also introducing a number of new, less obtrusive contextual ad units that complement longer form broadband content. These include clickable "overlay units," which appear for a few seconds during a video stream in the lower third of the video screen. We are experimenting with other Flash ad units that appear in the context of the video player experience which can be triggered by cue points during the video stream. Introducing new Flash-based, interactive ads into the viewing experience provides new opportunities for deeper sponsorship integration and audience engagement.

Click here for the full article. Other contributors include Alan Schulman from imc2, Tracey Scheppach from Starcom, and Tod Sacerdoti from BrightRoll, among others.

Tags: advertising broadband video brightcove google