ValueClick Enables Banner and Rich Media Ads in Streaming Video Content

Company's Video Efforts Could Expand to Cable Television

By Jack Myers
Jack@Mediavillage.com

ValueClick is offering advertisers a way to incorporate banner-based direct response offers with their video ads.

Myers Publishing has forecast broadband video advertising will increase from an estimated $500 to $700 million in 2006 to, conservatively, $2.7 billion in 2010, with most of the growth coming from in-stream advertising. Today, ValueClick Media is introducing an in-stream video solution in beta format for advertisers and publishers that enables advertisers to insert multiple format ads, including video, rich media or static banners into pre and post-roll inventory accompanying streaming video content.

The launch, explains ValueClick VP for product management John Ellis, is intended to respond to the accelerating growth of video ad inventory and marketers' need for flexibility. "Thus far, most of what's happening in the in-stream space is a repurposing of TV commercials to online," explained Ellis in a conversation with Jack Myers Media Business Report. "This works for branding messages but not necessarily for direct response, which most advertisers want from their online advertising. We want to provide flexibility for marketers' branding and DR objectives by enabling them to associate their existing online ad formats with the growing amount of video content."



The strategy enables second and third tier website publishers to increase their video content without concern about demand from in-stream video advertisers. While first tier sites are selling out their entire inventory and could probably double their revenues with added inventory, marketers and agencies have been reluctant to extend video campaigns to the thousands of smaller sites aligned with networks such as ValueClick, which represents 13,500 sites reaching 75 percent of the U.S. population monthly.

"Advertisers want performance and scale," says Ellis. "We are accountable for what happens. We are in such an early stage we felt it was important to give clients creative opportunities and to have a full tool sets to experiment with. We believe traditional rich media and banner ads will perform better incorporated with video content, and we are looking at click through and conversion as well as the lift in brand metrics."

Dave Yovanno, ValueClick general manager, points out 25 percent of ValueClick's publishers currently run video content on their sites and expects it will grow to 50 percent in the next four months. Through the new ValueClick service, he says, these publishers will have the opportunity to run all current advertising formats in this newly created inventory. "Content is moving from text based to video, which is more expensive for publishers to support. They need increased ad revenues to underwrite this content, but demand for video inventory is not necessarily equal to the growing supply. We're responding to that need and offering advertisers a way to incorporate banner-based direct response offers with their video ads."

Yovanno believes the ValueClick model will also apply to interactive television by incorporating information into the feedback loop and combining video with static advertising messages. "The biggest opportunity is to leverage the mindshare and market share we have with our 13,500 sites, along with the growing amount of video content, and to offer optimization techniques and solutions that we think will be unique."



John Ardis, ValueClick's Vice President for Corporate Strategy, acknowledges the company "has relationships with newspapers and local TV affiliates and we are in negotiations to represent their display ad inventory and online inventory. We're looking to bring in more branded media inventory, and could potentially add cable programming." The planned eBay auction model being investigated by several marketers and agencies with selected cable networks for a first quarter test, Ardis suggests, signals that "major brands are questioning the value they are currently receiving from traditional media and they are seeking greater cost efficiencies." Yovanno adds, "the auction model is good for valuable or for low cost inventory and in the auction environment there are inconsistencies and unknowns. Our position is in between, serving clients and planners who want cost efficiencies with consistent campaign performance and reliability."

Ardis agrees: "Our reach coupled with performance, pricing and more emotive and branding video opportunities bodes well for the online industry. The ValueClick beta service," he says, "is an attempt is to be ahead of the video wave and enable the long tail of the Internet to get on the video bandwagon at an early stage. Demand for video is increasing rapidly and our focus is on performance for the marketers and generating revenues for the publishers."