November 14, 2006

A Quick Comment About Pre-Roll Advertising

I usually prefer to keep market commentary to my personal blog over at Democracyinmedia.com, but I thought that this post was especially salient to this blog, so I’m breaking the rules a little.

I was at the Digital Hollywood conference a few weeks back and I was spending a lot of time listening to different folks talk about advertising within Internet video streams. There was literally dozens of talks and many of them (most) seemed to revolve around this problem of monetizing Internet video. Given the recent sale of YouTube to Google, the debate around whether Internet video and user generated content were real phenoms or passing fads appeared over. The conversation had moved on to, ‘How do we all make money on this explosive consumer adoption?’ 

It was amazing that the only ideas that seemed to be kicked about were basically the same tired ideas of pre-roll and post-roll advertising. Pre-roll advertising!?! About the only other type of monetization was the idea of skinning a site or page and changing the advertiser for the branding right (oh, and sponsor integration into the content). This seemed the least obtrusive, but certainly not revolutionary. This seems incredible to me. Given the amount of growth in the market and the number of smart people looking at this problem, can’t we come up with something better than mandatory pre-rolls? We all hate them, right?

Pre-roll advertising will remain a fixture of the Internet video space for some time to come. This is simply because there are so many ad dollars chasing so little inventory (another common theme at the event). Advertisers will stick with the formats they know (15 and 30 second canned commercials) and there will be so much money to be made that the ad space will get sold. But this is temporary. 

Pre-rolls are anathema to syndication. Nobody likes to watch pre-roll advertising because, well, it just sucks. It’s typically the same ad I’ve watched in the same site a half dozen times already. It’s typically not even something I’m remotely interested in. It’s got all of the lameness of broadcast advertising, but it’s far worse. I can’t skip it and it’s excruciatingly repetitive and simultaneously irrelevant. Nobody is going to virally pass around a video assert that is so blatantly irritating. Not unless you’re spamming someone. The only place that these pre-rolls work is on long form content that is known by the customer to have significant value to them already. I’ll sit through the AT&T ad to watch ‘Deadwood’ online, but only because I am making a conscious decision to trade my attention for valuable content. This is a tradeoff that people are not willing to make with most web video because it’s relevance to them is uncertain (not to mention 3 minutes of web video is typically not as entertaining as 45 minutes of Deadwood).

The lessons learned are that ads need to be relevant and avoidable. That sounds weird, but in order to make advertising work, even within video, it must obey the rules of Internet advertising in general. Pre-roll does not and it will die as soon as supply and demand gets a little more in sync. We think there is a much better way…