Update: The emerging industry of interactive video advertising

February 27th, 2008

It is becoming increasingly clear that the future of television is undeniably connected to the evolution of interactive video advertising. I’d like to share with you a short excerpt from the 2007 Entertainment, Media & Advertising Market Research Handbook.

“Never has the advertising industry – whose best known product remains the 30 second commercial – faced such wide ranging threats. Ad-skipping devices such as the digital video recorder continue to penetrate homes across Europe and the USA. Even sites which offer video entertainment find it increasingly difficult to catch consumers with traditional ads. Meanwhile the advertisers are becoming more demanding and ask for better proof that the billions of dollars they sink into advertising actually pay off. Here lies a significant opportunity for newcomers to the media and broadcasting industry to rethink traditional approaches and offer advertisers technology which provide alternative ways to target their consumers.”

I’d like to take an opportunity to take a look at the newcomers in this area and along the way share some interesting new video formats. Basically what these companies have on offer are various types of players which can be embedded in any type of website, using the Flash or Javascript protocol.

As this is still an emerging industry you may like to familiarize yourself with terms used for the currently available formats. Currently the most popular format is In-Stream Advertising. Typically they run before (pre-roll) or after (post-roll) a requested video online. In my opinion the most exciting evolution is the User Initiated Ad . Here you are giving viewer the power to click on, roll over objects in a video and trigger events inside or outside of the video. The level of interactivity for both formats is largely dependent on a complex mesh of Flash layers. Currently there are few providers of customizable interactive players and the standard functions are still limited or in development.

The first on my list of companies to watch is the Silicon Valley start up Ooyala.com, founded in 2007 by three Google engineers and well on their way to becoming one of the leaders in interactive and HD video serving. Ooyala already serves most of the content for the Indian Times and has contracts underway with some of the largest US movie studios. Ooyala has developed a player making it possible to serve various types of new interactive video formats including User Initiated Ads. Ooyala proprietory Backlot video management system is an impressive solution allowing for maximum control regarding syndication and tracking of video content on the web. http://www.ooyala.com

A pioneer is Plymedia.com, an Isreali/US company established in 2006. PLYmedia deployed their interactive and multi-dimensional web video platform before most of their competitors and currently offer the best developed User Initiated Ad functionalities. I was especially impressed by the non-intrusive Infoply method which uses a click in screen technique to offer more information on an object in screen. http://www.plymedia.com

Another Silicon Valley company which has been turning heads is YuMe.com. They will be serving InVideo overlay ads as part of Google’s AdSense™ for video beta advertising program. They offer a similar management system to Ooyala.com however in my opinion each company has a significantly different approach to the level of intrusion of commercial content but I think this is a matter of taste. YuME boasts a bewildering number of different formats some of which are available for mobile and IPTV platforms. http://www.YuMe.com

Update 18 april 2008

After having visited the conferences NAB in Las Vegas and Ad Tech San Francisco I feel this post should be updated to reflect a more complete overview of this market space. However I should add that some of these companies should be catagorized as adserve networks so there is more emphasis met on the adserve networking capabilities.

Adjustables.com
Originally a Dutch company which opened a branch in Silicon Valley this year. Adjustables distinguishes itself by offering advertisements (logos, banners, etc.) that float inside online videos, during the play out of the video content. Adjustables provides publishers of online video with advanced technology (patent pending) for integrating ads inside streaming video, less annoying other than just offering pre-rolls.Podtrac.com
A service that connects podcasters and podcast listeners and viewers with advertisers. They match audience demographics and interests with the appropriate advertising for those listeners and viewers and are more of a video adserver with large network capabilities.

AdoTube.com
A low brow video inventory server focusing on ad presentation. Creative functionality includes in-video lead generation campaigns, in-video credit card processing for video monetizing, and a Supervised Contexutalization® approach for contextualizing video libraries. They offer publishing networks but you will need to demo to have a better idea of their reach.

Aditall.com
AditAll is a video advertising community where users can quickly, simply and inexpensively create, produce and distribute video ads. Producers upload video and music clips to the AditAll inventory and set the price for their work. Advertisers can browse this inventory to find, customize and purchase the clip they like best for their needs. As with Adotube it’s early days yet and I can’t tell you much about the market reach.

Mediflo.com
MediaFLO USA, a division of Qualcomm Incorporated, aggregates and delivers premium, TV-quality entertainment and information services to mobile devices over its dedicated nationwide wireless network across the US. Its basically end to end. This is a distribution system which incorporates DRM and offers a product which could appeal to network broadcasters willing to distribute video content over a vast range of 3G capable devices.

Limelight.com
Limelight Networks offers an end to end video content delivery sytem which is used by thousands of entertainment, technology, enterprise, and government entities around the world. They enable any object in their digital media library to be instantly delivered and monetized with DRM. It offers its service over a dedicated fiber-optic network and essentially they target larger broadcast networks.

Videoclix.com has pioneered the clickable video space since 1998. All objects in VideoClix content are clickable, providing a next generation interactive video platform with a robust monetization solution for content providers, and an effective non-intrusive media vehicle for advertisers. The company caters to top producers and advertisers with its end-to-end hypervideo solution that includes: authoring, content delivery network, HD quality player, metrics, syndication, social media and standard IAB display ads. VideoClix helps monetize content through the VideoClix Ad Delivery Network while enabling content providers to bring their own advertisers, sponsors and brand integration deals to the table.

I am sure there are players I have left out, this was more of a reveiw of the companies I have been able to look at recently. However should you come across interesting additions to this list please do not hesitate to post your views.

Posted by Elisabeth Bertrand -
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Entry Filed under: Anything else, DTV, Video, Web 2.0