Pre-Roll: Too Few Advertisers, Too Many Videos

by Les Luchter, Friday, Jun 15, 2007 6:00 AM ET
WHILE MORE CONTEXTUALLY TARGETED FORMS of online video
advertising--including tickers, in-screen and bumpers--wait for their
turn to shine, the already "traditional" online format of pre-roll is
suffering from too few advertisers buying up lots and lots of
inventory.

That was the message conveyed by Ari Paparo, vice president of rich
media at DoubleClick, who spoke on the Promax's "Future of Online
Advertising" panel yesterday. "Only 20 advertisers are doing
in-stream," Paparo said--and, ironically for an ad format that closely
mimics traditional TV spots, they're the CPG companies, auto and
finance companies that are "running away from television...They're
buying whatever inventory they can."

Paparo was responding to a question by panel moderator Will Richmond,
the president and founder of Broadband Directions, who wondered why,
although he receives other Internet ads targeted directly to him, he
keeps seeing pre-rolls for tampons.

Eric Druckenmiller, media director for digital agency Deep Focus,
added that "a lot of in-stream advertising is being bought by larger
CPGs without much thought if they're reaching the right audience."

Fred McIntyre, senior vice president of AOL Video, noted just how many
videos are now on the Internet compared to when AOL started to run
pre-rolls just two-and-a-half years ago--in 2006, 2 million videos,
now 20 million, and by the end of the year, an estimated 50 millions.
McIntyre added that AOL's video search engine, which is free to all
takers, now has 40 million unique users.

Paparo pointed out the difficulty of buying video properties that may
be available through five or six portals: "If I want to reach the
'Lost' audience, I may need to make six different deals, with six
different creatives."

A similar media buying dilemma on a much larger scale was expressed
earlier in the day on another Promax panel by Aaron Cohen, executive
vice president of Horizon Media, who said that his agency had seen
presentations from 94 cable networks, five broadcast networks and
seven syndication companies-not to mention print and radio
companies--each of which had a "wheel" offering myriad opportunities
across multiple platforms.

What do we do with 100-plus wheels?" Cohen asked, pointing out the
complexities of both buying and measuring. In order to cope with media
companies that are offering multiplatform opportunities, he said,
media companies need to implement "total integration of online people
with traditional media buyers....From our perspective, we need a
wheel."