Online Video Advertising: The Myth of the Inventory Drought

Very good post by Randy Kilgore:

WE HEAR IT ALL THE time: there's a scarcity of inventory for online
video advertisers. Although it seems to be the prevailing wisdom, it's
simply not true.

According to the Interactive Advertising Bureau, the top 50 sites
account for 94% of all online ad spending. Some quick
back-of-the-envelope calculations reveal a significant surfeit of
great sites with an enormous amount of available inventory that are
part of that remaining 6%--outside the top 50. There's certainly a lot
to be said for the benefits of advertising on top sites, but 94% is
just a ridiculous number.

Clearly, the "destination" sites--the networks and the portals--are
selling out their video inventory, but in many cases that inventory is
being thrown in with the TV buy. Then we have the "mid-tail" and the
"long-tail." As more and more small and medium-sized Web publishers
bring video content online, inventory is exploding. And many of these
sites are using video in nontraditional ways.

According to comScore, in both July and August of this year, 7 billion
videos were streamed in the U.S. But according to Accustream, in July
the available pre-roll marketplace was just over a billion streams.
And that billion is highly concentrated on a few large sites.

Shorter ads (:7 - :10) that are designed specifically for online video
opportunities create a better user experience and are driving
publishers to continue to add in-stream advertising to their video
content en masse.

Effective use of video doesn't necessarily have to be pre-roll. Many
advertisers are finding in-banner video to be extremely compelling.
There is certainly no limit to the inventory for in-banner video ads,
and many marketers find that the level of engagement that's available
with in-banner video generates a significant brand boost.

Engaging post-roll is an effective option--and as more and more
long-form video comes online, multiple mid-roll ads increase the
number of ads slots that are available. Many advertisers are also
finding successful placements with video sponsorships.

New technologies and formats that are developing (e.g., video chats
with ads included, online games with video ads before and between
scenes) all add to the potential volume of inventory. And for
advertisers lacking video assets, there are still ways to take
advantage, including building flash ads to play in video spots.

Finally, there's the explosion of consumer-generated video. Although
it scares most marketers to lose their brand in the world of
user-generated, still with the usage of behavioral targeting
technology, it's possible to find in-market consumers.

Inventory scarcity? Drought of online video ad avails? Not at all.
Just a lack of creativity. It's time to wake up to the huge
opportunity that's available beyond the top few sites. It's time to
look at the long tail, because that's where the volume of video
inventory is waiting to be discovered.

Randy Kilgore is chief revenue officer for Tremor Network, responsible
for managing the company's sales and inventory growth. He was
previously senior vice president of advertising for Dow Jones Online.