Pre-rolls and the future of video advertising

Cisco, the people who manage the pipes of the Net, is just one of the groups that are betting on the future of online video. 70% of the growth of Web content between now and 2014, they say, will be video. Other research shows that, too, and I have to agree that it sure looks like our lives are about to be much more video-centric.

You’d think this would be a good thing for broadcasters. After all, video is our world, and yet newspapers have been winning the online video race for a number of years. YouTube is THE repository of all that is video, and many other streaming portals are out there, too. The infrastructure is in place — or mostly in place — for this video-centric Web. Search is next, and search will include sophisticated image recognition software. It promises to be a fun world.

There’s a big “but” standing in the way, however, and where it goes will determine the winners and losers of tomorrow. I’m talking about how to make money with all that video.

Early Saturday I was perusing my RSS reader and came across an E! News video clip of Charlie Sheen making a fool of himself on the radio. I hit the play button, and up popped a 30-second Banana Republic made-for-TV ad. Nice ad, but it had no business running ahead of the Sheen video — for reasons I have discussed for many years — but its placement there is evidence that those who “should” own the video niche tomorrow won’t. Like bundled advertising was to newspapers, video pre-roll ads are a strategic blunder of trying to bolt the new onto the old instead of exploring options that better fit the Web. There’s a lot of money in pre-rolls, however, because that’s what Madison Avenue wants, and in this way, both Madison Avenue and legacy media are bedfellows in their own destruction. I don’t know how to state it more clearly than to ask you to consider the viability of a 30-second brand advertisement, one that’s made for a passive TV viewing experience, being slapped in front of a piece of video on the participatory, real time Web. Why do we shoot ourselves in the foot this way?

Banana Republic Ad via ENews

After the Sheen video, I clicked on another one that I wanted to watch, and wouldn’t you know it, there was the same Banana Republic 30 second ad. By this time, I was not only pissed at E!News, I was also pissed at Banana Republic. Somebody at E! gets a check from Banana Republic and deposits it into an account, and people go about living their lives. But they do so foolishly thinking “no problem.” Big problem.

Commoditized pre-rolls are simply not what’s going to drive Web video into the future. There’s lots of evidence that advertisers like pre-rolls and are willing to pay for them, but there’s an equal amount of research to suggest that users hate them. I’ve actually made the decision not to watch a video, because of a pre-roll, and I know I’m not alone. Long ago, MSN did research about the optimal length for a pre-roll. 7–10 seconds is it. Period. And yet, we’re running 30s knowing that we’re simply pissing people off. Why do we do that? Because it’s easy, and we need the money.

In so doing, we’re unwittingly handing over the keys to the online video niche to others — smart people who understand that the Web is not TV and that it must be served differently. They will discover other solutions, because it’s very unlikely those solutions will come from traditional television.

First of all, the Web is in real time and time is the new currency. Even though I can select what I want to watch and when I want to watch it, to the Web, I’m doing that in real time. There are opportunities for advertising relevance there. Putting a meaningless 30-second Banana Republic ad in my face when I’m looking to hear from Charlie Sheen disrespects me by wasting my time, and it misses the opportunity to do something meaningful with the here-and-now attention I’ve just given it. A 10-second topical promo for something coming up on TV that hour would be more relevant than a branding spot for Banana Republic. That’s perhaps a bad example, but you get the idea. If it’s late morning, how about a 10-second “McDonald’s for lunch” spot? Give me something relevant!

“But, Terry, Banana Republic wants to give us a wad of cash for those spots. Are you saying turn that down?” God forbid, but as we’re taking that cash, let’s make sure we understand the ramifications of so doing. The temperature of the water that our frog sits in goes up a little each time.

Secondly, the Web is incredibly efficient at delivering real time messages to highly specific targets. Direct marketing is its specialty. As long as we think of ourselves as video content providers and care nothing about connecting with individual browsers within our reach, we will continue to abdicate opportunity to others. We need the data to know who’s watching our videos, so that we can deliver specific messages tailored to them. At least it will increase the relevance when we interrupt them with pre-rolls. This also allows us to raise rates on advertising, because we’re not using the scattergun, mass-media approach that Banana Republic apparently likes so much.

Or how about getting into the post-roll business with a pre-roll banner? That way, people who want more information about who/what’s sponsoring the video can stick around without destroying the experience of the user who doesn’t. This is a YouTube model that I like very much, and I find myself sticking around for more ads than you might think.

The point is that video is still in its infancy, and now is the time to decide how we’re going to monetize that which we provide. I sincerely hope we don’t let Madison Avenue make the rules, because they don’t really give a crap about us. Sitting back and waiting to see what sells — as we’ve done with every other stage of digital development — will keep us from ever establishing for ourselves the value of our content. That’s going to require ingenuity and the courage to maybe even say “no” once in awhile when the Banana Republics of the world come calling.


  1. Right outta the ballpark, Terry. And news videos are notoriously short — usually no more than 60 or 90 seconds — so it makes NO SENSE to me for advertisers to run a (for instance) 30-second ad in front of a news video that is, say, 52 seconds long.

    I like your example: a 5 or 8 second video telling viewers to stick around after the news clip for a great deal/sale/promotion segment.

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