Online Video Monetization: Getting Down to Reality

The Wall Street Journal ran a piece today (sub req.) on a few video ad technologies that are being developed. These are mostly geared toward national advertisers and branding, but there are important implications here for local.

In the ongoing discussion of how local advertising will play a part in the online video revolution, an important question (beyond the many questions surrounding advertiser adoption and ad sales strategies) is what format these ads will take.

The same question plagues all forms of advertising that will be applied to online video. The easiest and currently most prevalent form of video ads  pre-roll  has been met with a resounding “boo” from a majority of consumers. So what are the other options? Performance-based text advertising that appears adjacent to video is one, but this lacks a desired level of engagement or interactivity with the content itself.

The Journal article gets into a few more possibilities that involve banner ads that are dynamically inserted in and out of video windows at the exact moment a word is spoken that is contextually relevant to an ad. The ad format in question here is a text link or display ad that offers the option to watch an accompanying video ad or go to a company’s Web site.

One company mentioned in the article, called ScanScout, is working on such a platform that employs voice recognition technology to figure out the content of a video clip. The article briefly mentions Blinkx which is also doing some very interesting things with voice recognition technology and video search. This goes beyond traditional methods of video search that use meta data or closed captioning transcripts, which can have sporadic availability.

The New York Times has a nice write-up on Blinkx earlier in the week. Interestingly, video search has the same core challenge as video ad distribution  automating the contextual “understanding” of a piece of video content. A challenge also currently lies in low advertiser adoption, according to Blinkx CTO Suranga Chandratillake (who expressed many of the same concerns at last year’s Drilling Down on Local conference).

“There currently aren’t enough video advertisers to provide ads that match many specific key words,” he told The Journal. “For example, even if you identify the words ‘Canon digital camera’ in the dialogue on a video clip, there may not be a video ad to go alongside.”

Better voice recognition could push both video search quality and advertiser interest forward (here also lies the all too familiar chicken-and-egg dilemma between content and demand). It could also help to ease many marketers’ worries that their advertising will show up next to racy or controversial video content by offering the ability to buy certain keywords and steer clear of others.

It still seems like a compelling solution is a long way off, especially before this has any effect on the development of the local video ad ecosystem, given the many question marks that remain there. But this type of experimentation is important if we’re to arrive on some real answers (and real business models) on what works with online video ad distribution  from both advertiser and user perspectives.

We’ll have a panel discussion during day 1 of Drilling Down on Local (March 19-21) focused on the infusion of video content in online local media:

Track B TECH: Video Injection into Local
With broadband, Wi-Fi and iPods, video is all at once everywhere on the Internet. Kids are all over YouTube, auto dealers are doing mashups, Yellow Pages are developing IPTV, newspapers are creating virtual TV stations  and TV stations are selling local advertisers pre-roll ads and cutting into classifieds. Where is it all going? How can you be part of the latest thing?
Speakers
Bob Armour, CMO, ShopLocal
Matt Crowley, VP, Marketing, YellowPages.com
Bradley Inman, President, TurnHere.com
Perry Solomon, VP, Business Development, FAST Search & Transfer
Hope to see you there.

Hope to see you there.

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