Economic Woes Forcing Web Video Providers to Be More Ad-Creative
HOLLYWOOD -- Advertising has been the most successful revenue model for short-form and TV-based online video, and will remain so, executives said at last week’s Future of Television West conference. Still, the plunging economy has taken its toll, forcing Web video providers to develop more- targeted ad opportunities for major partners and brands, they said.
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“Some major brands have cut budgets and we have obviously been affected,” said Jason Kirk, vice president of video and entertainment at MySpace.com. “But other areas have increased, such as hyper-targeting of ads. Also in the last few months, we have rolled out local ads based on an individual’s geographic location. Some of the more general ads have gone down, but other more-targeted opportunities have improved.”
For MySpace, that includes a new initiative in partnership with Endemol, which launched last week. It invites MySpace users to participate in a “Get Married on MySpace” contest to have their wedding planned and themed by the MySpace audience, then streamed through Web video installments on MySpace TV. “Our sponsor, Disney, is participating with ads and they're also integrated in the Web series,” Kirk said. For example, stars from upcoming Disney films may be part of episodes that reveal moments from the wedding planning in the series, he said. MySpace developed and launched the idea based on information it gleans from its user base, a million and a half of whom claim to currently be engaged to be married. “We're trying to be more creative,” Kirk said.
There are so many different ad formats, it’s not clear there is going to be one that dominates, said Kevin Yen, director of strategic partners for YouTube. “What works for one partner might not work for another,” he said. “We are testing everything: pre-rolls, post-rolls, integrated ads, branded entertainment. We're trying to graft a search model on YouTube and we're seeing pockets of success.”
Crackle.com, which is owned and operated by Sony Pictures, is thriving as the site is migrating away from its user- generated-video roots and more toward premium content, said Eric Berger, senior vice president of mobile entertainment and digital at Sony Pictures Television. “Our ad opportunities are increasing,” he said. “While we understand the economy is challenging, brands are still interested in aligning their brands with premium content.”
Even with more CE makers developing integrated devices to stream Internet video directly to TVs, the thought of whether online video’s traditional user-generated and short- form ad-supported content will or should land on the home theater screen is still up for debate, panelists said. Viewers usually migrate to the largest screen available when they are watching bigger-budget premium content, Sony’s Berger said. “But I don’t think we are looking for a magic bullet to get all our videos to the TV yet,” he said.
Original series and user-generated video site Break.com is benefitting from diversification, said CEO Keith Richman, offering super-targeted reach into hundreds of partner Web sites for advertisers looking to reach very specific audiences. Break.com has done a lot of focus groups on the topic, but demand for the kind of online video content the YouTube generation has grown accustomed to viewing on laptops and desktops travel to the television set is still unclear, Richman said. “In theory, we're all thinking about the other screen,” Break.com’s Richman said. “All of us believe in three to seven years there will be a merging of screens, but it’s not entirely clear how important it is to all of our audiences.”