Editorial Articles

Looking back to last year, I was rather bullish about the 2009 online video market, and felt that large growth was inevitable. My confidence boiled down to two key factors:

1) all popular destination sites were committed to enhancing their websites with video content

2) broadcasters were pointing to their web video on-demand (VOD) offerings as a significant part of their future growth.

Video viewing across the UK web is now more popular than ever. The UK web has seen a huge range of professionally produced video content made available across the leading consumer websites including portals, ISP’s, music and magazine sites. And with the wide choice of short and long-form content available, viewers are naturally consuming more video than ever before.

Nothing too shocking there, but the big question for my company going into last year was how will advertisers and media buying agencies embrace the growing popularity of online video content?

The first quarter was encouraging, with a strong mix of campaigns flowing into the market place. The pre-roll ad spot was fast becoming the standard format for advertising around premium video content. Media buying agencies had mostly confirmed who was responsible for buying VOD campaigns, and were starting to get traction from their clients who were allocating budget to this new form of advertising.

As we went into the second quarter, pre-roll campaigns continued to be booked but spend remained modest. During this period, we had more interest in our video ad-network and premium channels than ever before. More buyers wanted meetings and more agencies wanted their clients to trial pre-roll advertising. Obviously, we were in the middle of the worst recession of our time, but with online video growing at such a rapid rate I just found it impossible to accept that the economic situation would slow down the growth of this industry. Maybe my prediction was a little optimistic, but we were getting positive feedback from media buyers and planners confirming that they would be investing more into VOD over the coming year.

With lots of promise and a recession that nobody really knew the full impact of, quarter three was always going to a pivotal time for our industry. It wasn’t so much the spend (or lack of it in July and August), it was about quarter four and the promise of significant investment into online video advertising from media buying agencies and major advertisers. As we started getting briefed for September ad campaigns, the promise that VOD was firmly on the radar was a reality, with pre-roll campaigns being included as part of the mix for far more advertisers than we had seen before.

In July we launched the first ever survey of UK VOD buyers, and over 100 respondents gave us another indication that the future of VOD advertising was looking up, with 97% of those surveyed planning on either maintaining or increasing video advertising spend. While reservations remained around the lack of research and measurement of this new form of advertising, media buyers would be increasing their spends, running more campaigns and focusing on the importance of video advertising for branding rather than just direct response, like most other web ad formats. Feedback from our survey, combined with actual campaign bookings, enabled us to confidently predict that online video advertising in the UK was at tipping point.

As I write this piece I am delighted to report that we have now tipped. Don’t get me wrong, online video has only just crossed the starting line and there are many challenges lying ahead for us to transform the newest form of advertising into the mainstream marketing mix. But I don’t expect it to be slowing down any time soon.

Author: Jamie Estrin, MD, Web TV Enterprise