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BizReport : Advertising : May 23, 2011

Why brands need to be in video now

Although the online video space is growing by leaps and bounds, television is still winning from an advertiser perspective. Roughly $70 billion is spent on television spots each year, even though the online space offers more targeting and cheaper pricing. Is now the time for online video ads? Yes, says one expert.

by Kristina Knight

Kristina: Are brands doing enough to break through the video space?

Mike Sullivan, CEO, Affine Systems: Brands are not currently doing enough to get into the video space. Right now, brands are going to premium sites to advertise like Hulu or NBC, where the video content is premium. The brands understand the content and this makes them comfortable to increase their amount of spending. However, premium content makes up only 10% of the online video ecosystem. 90% of online videos are 'unstructured' content such as viral videos that have a very high viewer engagement, yet brands are hesitant to increase their spend on this type of video because of the lack of visibility into the nature of the video content itself. Brands do need to hit the online video space a bit harder to make sure they are targeting all types of videos, not just the premium content.

Kristina: What about mobile? With more consumers connecting through smart-devices, do brands need a mobile and an online approach?

Mike: Right now, it's unclear if brands need to approach mobile differently than online video. There is currently a lot of mobile viewership for mobile videos, but almost nowhere where brands can buy ads against them. So, it's an unknown at the moment if mobile and video need to be approached differently. My gut feeling is that since TV, set top boxes and online videos are starting to converge ad-wise, and since research has shown ad effectiveness is not based on the screen they are played on, brands will need to have a video strategy and mobile will be part of that.

Kristina: What trends are you seeing in online video from an advertiser perspective?

Mike: Brands are definitely getting more creative in their video efforts. We're seeing brands increasing their budget for online video and that they're trying to scale their video buys. However, they're buying only premium content, which is more expensive and doesn't include unstructured video content, which is 90% of the online video ecosystem. The trends right now show that brands are still fixing some fundamental best practices around buying. They are very motivated to expand into the online video space and be creative with their efforts, so are using companies like Affine and data companies to provide clarity and classification for unstructured videos. Overall, we find it very exciting that brands aren't solely focused on TV anymore and are starting to dip their toes into digital. They're beginning to educate themselves and understand how everything works.

Tags: Affine Systems, mobile video, online video, video advertising, video content

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