Is There A Shortage Of Online Video Advertising Inventory?

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I didn't get a chance to see the premiere episode of Late Night With Jimmy Fallon on TV Monday night so last night, I checked out the archive online. Over the course of the entire show, NBC delivered the exact same 30 second Windex commercial five times. While I have been complaining about the lack of targeted online video advertising for some time, this isn't even about targeting.

Why is NBC delivering me the same ad five times in a row? I find that hard to believe that NBC has no other ad sponsors for the premiere episode of Late Night With Jimmy Fallon. I know it says Windex is the sponsor, but if I play back other clips from the same show, I get an ad for FedEx. And even if Windex is the only sponsor, what impact do they think their ad is going to have when played five times in a row? Now it just annoys me and makes me want to not buy any Windex products. What's the problem here? Is there a shortage of online video advertising inventory? Do advertisers just not get it? Clearly, this isn't working.

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  • Drew Robertson

    I think the problem is that NBC doesn’t have enough rights-cleared spots ready to go. This has been a persistent problem since…forever. It’s why local stations can’t simulcast their programming even within their DMA. If I were NBC, I’d tell agencies and advertisers that after a certain date, ad units that are not cleared for internet won’t be accepted. It’d be tough stuff in this crappy advertising economy but if not now when?

  • Mike

    As I understand, a lot potential sponsors are still unconvinced that a commercial on a computer screen will have the same impact as commercial on a television. Industries change very slowly and Internet video has only been a real market for 3 years now. Although one would think tightening budgets in the recession might motivate some innovative approaches.

  • Drew… hardley the case. It’s not the ads that need their rights cleared…. it’s the programming. NBC more than likely had a quote to meet for Windex and it’s very common to just put an ad in rotation until it reaches the advertisers quote. Nevermind that most players won’t cookie your machine so they know not the show you the same ad over and over. Go look at TMZ.com for an example of this.
    Dan I have posted numerous times on here and many other sites/boards/forums etc and have been saying for over a year now this day was coming.
    There is not enough ad inventory to support the type of revenue that ad-supported plays need to see to succeed. Furthermore, viewers are not clicking on ads or visiting the sponsors sites in the numbers they need to generated the type of revenue ad-supported plays need to succeed.
    Therefore, ad-supported plays are going to go the wayside this year as premium pay-media steps in.
    There is still no free lunch.

  • While I’m all for establishing a more robust paid media marketplace, I think it’s irresponsible to say ad-supported plays are going by the wayside.
    We haven’t even given that space a chance to stretch out its wings yet!
    Biggest problem is there seems to be a breakdown in terms of what’s happening vs. what’s possible. Why is it that big content guys aren’t empowering their advertisers to queue up a series of ads to play rather than repeating the same one? I can understand the issue of cookies, but why the same ad plays on sequential ad breaks within the same piece of content is beyond me.
    And why aren’t we seeing sequential ad campaigns created for online? Of course there’s going to be some extra cost involved, but I’m willing to bet a three-part ad that played out over the course of an entire video could be very effective at converting clicks. Lots of creative possibilities.
    We just need more experimentation to prove what’s possible. What I wonder is why that isn’t happening much yet.

  • Geoff,
    It’s been happening for years now. In 2008 it kicked into overdrive.
    The issue is that users don’t click on Ads and they aren’t buying from Internet advertisors they way they need to to justify these campaigns.
    For example, the reason Hulu is pulling back their content is that they are not getting the kind of money per CPM they need for their ads so they choked out their distro partners to drive up eyeballs on their ads so they can charge more.
    Supply and Demand are what is holding this marketplace back. There is too much in the way of supply of ads and not enough in the way of demand.
    Users are not into ads. They are willing to buy their media so they can view it and be left alone. That’s just how it is.
    Regards,
    Christopher

  • Adam Tuttle

    Actually I believe that the problem is not with the lack of advertisers or with the selling rights for the content but with management and technology.
    Digital is a separate division for most of these broadcasters and they keep everything separated – including ad sales and trafficking.
    As video ad technology adoptions increase we’ll see better presentations of ads and better use of targeting technology. As more online ad companies move into Video well see better use of behavioral and optimization technologies that allow for more personalized ad delivery. Right now most of the Online divisions are charged with selling their own inventory and video is a small part of a larger buy or is just thrown in as a make-good or ad on. The online ad sales teams don’t necessarily have the tools to run video and the broadcast sales teams don’t sell online.
    It drives me nuts to know that the technology to maximize the revenue from these streams exists but that politics and segmentation of ad sales limits the adoption and use. There is a ton of money being left on the table because of how slow these companies move.

  • Its a hot topic.
    I have been trying to find an ad provider for an online video source (one of our clients) that regularly attracts between 2 to 5m video plays over a month. At this sort of volume i would normally expect advertising to be abundant – its not niche-UGC.
    So we integrated 3 different ad providers who all promised to follow up with some superb revenue, only to find that they couldnt actually provide any adverts at all.. oh apologies: they provided one offer for 50,000 prerolls of a Pugeot advert – which would have netted us less in revenue than it would have cost us in time to raise the invoice…
    So we now have a block that we wont integrate advertisers until they actually show advert inventory. And strangely of the next 6 we saw and pushed back on in this way, none could show an ad.
    So it seems they are all trying to get footprints on demgital media assets, andoffer revenue, but dont actually have any real income on which to basethis revenue offer…
    I am with Dan: there is not (yet) enough ad activity to really make the ad models fly.It is definatley a cultural thing as advertising shifts online etc and the saleshouses learn to sell online, but there is also a hugh issue with the sheer scale of internet video.In many ways its like the porn industry: eveyone jokes that porn is the only way to make money, simply based on teh proliferation of porn on the ‘net: However there are so many providers that no one provider makes a lotof revenue(with a few notable exceptions) so the sector has money, but no organisations have any real market share. I think the same is true with internet video advertising. There are many with models, but getting the right juncture of an advertiser, a technology and an audience all in the right room is still a rare event.

  • Some interesting comments.
    I’ve been involved in building video technologies for about 10 years now, and only recently has there been enough interest to make online video financially viable.
    Of course, if you go to providers of inventory like uTarget etc. then you’ll be paid an absolute pittance for CPM, simply because the advertising within a player as pre/post roll just doesnt engage the viewer – it annoys them.
    There are options of course but the placement and targeting of a cmapaign is critical for success. Place your video advertising in the right place and it will get results. If you’re a local business provideing a local service then advertise ‘locally’. this might seem obvious but it’s harder to achieve than most people realise. Contact your local newpaper and ask if they supply video advertising on their website.

  • Patricia Newson

    Just check out Promo by Slidely (slide.ly/promo) solved our content problems;)!