NTV Predictions: Video Advertising

 Written by Liz Gannes
Posted Thursday, December 27, 2007 at 5:00 PM PT

Among the questions we’ve asked our panel of experts was this one: Which online video ad format will become dominant in 2008?Selections from their responses are below. We’d love to hear your take on the question or on our panelists’ predictions in the comments. For more information on the NewTeeVee 2008 outsourced predictions, see this post.

Kevin Nalty, “self-proclaimed viral video genius” (a.k.a. Nalts from YouTube):

“Google’s InVideo ad is clearly the model. It’s less intrusive, it’s targetable, and it works for marketers. Google didn’t invent overlay ads and they won’t be the only entities that provide it. But in 2008 we’ll see prerolls relegated to just the most valuable content, and surrounding banners becoming commoditized.”

Steve Woolf, Smashface Productions (co-creator of EPIC-FU):

“Overlays have a shot at being dominant. They give the advertiser and ad agency some control over the presentation of the message to the viewer, and impressions and clickthroughs are still the most measurable metrics. As long as they don’t make them too obnoxious and alienate users.

“But you know what I think will really rule the roost? Pre-rolls. Users don’t complain about pre-rolls for some reason. Content creators hate them, but users don’t bitch nearly enough to get advertisers to start thinking that they need another angle of approach if they are going to spend real money for an ad buy. As the pressure to generate revenue rises for video companies, we will see more and more pre-roll ads.”

Shashi Seth, head of monetization at YouTube (manages YouTube’s advertising products):

“I firmly believe that for any video ad format to succeed, it must be non-intrusive to users. In my opinion, that excludes pre-rolls, mid-rolls and post-rolls. I am not saying that these ad formats cannot exist — they just will not be dominant.

“The best online video ad format is [YouTube’s] InVideo ad, and it will become a more popular vehicle for advertisers in the coming years. The InVideo ad is good for everyone: it allows flexibility for advertisers to build creative that is interactive and specifically targeted, and it allows users to interact with engaging content that does not disrupt the user experience. With InVideo ads, YouTube users close the overlay less than 10% of the time, as opposed to pre-roll ads, which can have abandonment rates as high as 70%. Many other companies are also moving to this format.”

Richard de Silva, general partner at Highland Capital (investor in Metacafe):

“Overlay — bottom thirds. Not pre-roll.”

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