Given that Broadcast Interactive Media represents one of the largest networks of local TV sites on the Web, it’s inevitable that once video advertising really started to take off both BIM and our clients would be in the thick of it.

Now, with web video advertising estimated to hit nearly $800 million in 2007 (up from $350 million in 2006) and to grow just as quickly in the 2008 political year, the opinions and ideas as to what is the ‘right’ video advertising format are approaching a fever pitch.  This is true in all types of interactive companies, but particularly so within local media companies that own TV and radio stations or newspapers now that Veronis Suhler Stevenson has forecasted that interactive advertising is set to surpass standard television advertising by 2011.

To put it simply, everyone is fighting for a piece of the online video advertising pie, and with the barriers to entry for web video publishers at historic lows, everyone is essentially fighting to find the right way to aggregate an audience on the web and to monetize video streams (without immediately alienating the audience they’ve worked so hard to build).

Currently, the dominant form of interactive video advertising is the short video commercial that either precedes, follows, or interrupts a video clip that the viewer actually wants to watch.  These are the standard 15 second and 30 second pre-, post-, and mid-roll that the Internet Advertising Bureau (IAB) have officially sanctioned as IAB-compliant formats.

The advantages to the pre-, post, or mid-roll format can be summed up fairly easily, especially for BIM’s TV station clients:

• Such online video spots are directly analogous to a 30-second TV spot, so media and broadcast ad executives understand the branding benefits involved.
• They are fairly easy to sell on a CPM (cost per thousand impressions) basis, given that it’s easy to show the branding value of an active user click followed by a short commercial view.
• The pre-roll format is appealing to old-word Madison Avenue ad agencies and rep firms because they require creative effort to come up with a good spot for the client, and an advertiser has to be careful on which site this pre-roll spot runs (hence, the advertisers needs both the agency and the rep firm as middlemen to do this leg work).  This keeps people in something close to their current jobs.
• Online video commercials generally don’t interfere with the actual video by covering up any portion of the requested stream.

The disadvantages of the pre-roll or mid-roll format can also be fairly easily summed up, especially when compared to the stunning success of an advertising format such as Google AdSense that places small, textual links in the midst of stories.  (Google is forecasted to do roughly $9 billion in AdSense sales in 2007, and I cite comparisons to AdSense because many people credit Google and AdSense with nearly single-handedly bringing the online advertising market out of the doldrums in 2003.). 

• Pre-rolls (any form of short video commercial) requires creative work, making the ads inherently more difficult to place for small businesses with small ad budgets
• Online video commercials are inherently disruptive, especially when compared to contextual text ads, as they normally cannot be skipped and take the user away from what they’d really like to do or see online. 
• Most video publishers I speak with estimate that their video impressions drop by nearly 50% when the run 30-second pre-rolls, although some studies cited by the OMMA or OPA would disagree with this.
• The measurement of effectiveness for a video commercial is much harder to define than is a click-through on a display ad – the question remains, “Should pre-rolls be viewed as a branding opportunity or a direct response measurement?”
• One of the most appealing aspects to AdSense and online advertising in general is the ability to engage in CPC (cost per click) advertising and to quickly experiment with various campaigns in matter of days.
• Ad-serving companies such as DoubleClick, Atlast, and 24/7 RealMedia have only recently (ie, in the last 6 months) come up with an integrated way for a publisher to easily traffic both display and pre-roll ads from one integrated console.