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November 2, 2007

When a Bug is Good for Your Campaign
By John Conroy

Interactive marketing is an increasingly vital element to almost any advertising campaign, so it's best to start acclimating yourself with some of the incredible new branding opportunities out there.

It's pretty mind-blowing when you consider that 10 years ago most people didn't even have email. Mobile phones were just starting to trickle down to the mainstream (and weigh less than a barbell). The highest speed internet you could get on your home computer was from a 14.4 baud modem. It's a wonder how we got anything done.

Nowadays, of course, it's a completely different story. Broadband has surged, television is streaming to cell phones and TiVo has become the new Xerox or Kleenex (brand names that are synonymous with a generic consumer product). Computers are an integral component of the 21st century entertainment experience, where user-generated content is proving as popular -- if not more so -- than television programming. New living room devices appear almost every day that further blur the lines between television and the internet.

Naturally this simultaneously presents tremendous opportunities and massive hurdles for advertising models. New content requires new ad formats and new ways of thinking in order to reach an audience, and there has been a lot of thinking over the past decade as advertisers tried to comprehend and leverage what the fast growing online audience could offer them. As consumer interactivity and demographic hyper-targeting became a reality, banner ads gave way to animated web-spots, and pop-ups and pop-unders became so prevalent -- and so obnoxious -- that they spawned a whole cottage industry designed to eliminate them. Once ad serving technology advanced and internet speeds got fast enough to handle video, advertisers were able to take a sigh of relief and said, "Now we can run the same 30-second clips we run on TV!"
It was a good idea at the time. The 30-second spot had been the advertising standard for decades. But just as no one could predict that voyeuristic amateur videos made by lonely coeds and insane skateboarders would become Must See (Not Quite) TV, or that actual Must See TV would be watched on computers and downloaded to iPods, no one necessarily saw the writing on the wall for the traditional 30-second spot when it came to the internet.

This is not to say the 30-second spot is dead by any means. But confidence in it is eroding, and not just online. The age of TiVo has had a significant impact on ad effectiveness, much like VCRs did when they were introduced, hence the proliferation of watermarks, overlays and in-screen promotions that run parallel to TV shows.
But being online presents different challenges to advertisers for the same reason that makes it so alluring: interactivity. Similar to television commercials, online video ads typically run as "pre-rolls" before the content the user actually wants to watch. But unlike television, we have the ability to track user behavior online, in real time, to help us measure how effective (or not) our advertising is.
And what advertisers and content producers have been finding out is that viewers find 30-second pre-rolls to be incredibly annoying. So much so that if they can't find a way to immediately skip over the spot, nearly three out of four users simply abandon the content all together. It's a lose-lose scenario that's forcing a lot of companies to rethink the internet and find new ways to market to consumers without irritating them, but still fetching high prices from advertisers. We talked to a few of them to get a flavor for effective alternatives to the 30-second clip.

Skins

What they are. A skin changes the look and feel of the media player on your computer. They are usually composed of art, media and text that are combined to create a new appearance for the player itself or create a frame around the player. For example, you could watch a clip from your favorite television show online, and instead of just having it play within a straight-up, no-frills embedded Windows Media Player, it plays within a WMP screen that is framed by an ad for the Nintendo Wii, NASCAR or Sprite.

How they work. Skins offer a range of experiences, depending upon the advertiser's needs and budget and what the ad serving company can support. At its most basic level a skin can function similarly to a billboard: a solid, static image that remains on screen for as long as the video plays. Better than a billboard, however, the user can click anywhere on the skin and open a new browser window that leads to the advertiser's website. More complex skins can contain multiple clickable areas; for example, to lead to more than one product or a special promotional site. Others can change not only the way the media player looks, but how it functions as well.
A similar interactive advertising option is a "homepage takeover." Commonly seen on social networking sites, the homepage takeover replaces the background of a website with artwork and messaging about a particular product. Fox has made good use of takeovers on its MySpace site, which frequently transforms into advertisements for its movies and television series.

Takeaway. If what your campaign needs is straight-up brand awareness, skins offer a great opportunity. Your message and artwork are constantly visible for the duration of the video experience and there is minimal to no clutter. Skins tend to garner great recall and clickthrough rates, especially when framed around content that speaks to the advertiser's core demographic. For this reason they also demand a higher CPM than the average online ad unit. When used in conjunction with a short pre- or post-roll video spots, the results tend to be powerfully effective. Perhaps most importantly, skins are among the least disruptive to the user experience, which is supremely important when disruptive ads lead to immediate and harsh adverse reactions.
"Constant data and user feedback gives us a lot of information day in and day out that allows us to grow and evolve what we offer," says video site Heavy.com's Chief Marketing Officer Eric Hadley. "Because there is no proven standard yet, we have the ability to experiment to make sure both the advertiser and the user have a good experience."

Overlays

What they are. An overlay is a small animated graphic or banner that appears within a video player while the user watches content. Also known as a "bug," these ads are generally transparent to avoid disrupting what's being watched. They tend to appear at the bottom of the video screen and disappear after a short time. Another type of overlay is a "ticker," in which the bottom portion of video player is replaced by a scrolling banner advertisement, akin to a stock ticker or the tickers you see on CNN, MSBC or Fox News and sports and home shopping channels.

How they work. Bugs, tickers and other overlay ads have some flexibility in how they function. When the graphic appears, the user can click on it to get more information. This action usually pauses the video and either spawns another browser window and takes the viewer to the advertiser's website or opens up a "player within the player" to play a five- to 30-second spot with its own clickthrough capabilities. Once the user finishes interacting with the ad, the original video content resumes.

Takeaway. Just as overlays are becoming more and more popular in television advertising, bugs and tickers provide a parallel experience on the web, but with the added bonus of being truly interactive. When an advertiser is well-matched with the audience for the online program, overlays can have the effect of underscoring the main content. They are a non-intrusive way of feeding information to consumers and they are able to hit their audience in a way that directly and organically engages.
"What we have found is that consumers understand that content needs to be underwritten," says Eric Druckenmiller, media director for interactive ad agency, Deep Focus. "When ads are done in a tasteful, consumer-friendly way that doesn't interrupt the online experience, they don't mind them being there."

Video-in-video

What they are. Video-in-video ads can take different forms. Some place a small interactive box in an upper corner of the main video content. Others place a smaller video box next to the primary content. Some can offer up spots as part of an expandable sidebar, which opens up additional real estate for links and banners. Video-in-video spots usually contain animation in the form of a short clip from a longer video spot on loop, but they don't contain audio, ensuring sound doesn't overlap and minimizing disruption to the user.

How they work. If the user clicks on the video ad, the content he is watching temporarily pauses and the video spot plays in its place. Once the ad runs, the consumer is returned to the video he is watching. If the user doesn't click on the spot, it usually disappears after several seconds. Clickthrough rates are tracked like they would be for a banner, bug or skin. The spot itself can have range in duration from a few seconds to a full 30-second clip, though these should not be confused with pre- or post-roll video spots. Video-in-video ads require users to opt-in to watching the ad, rather than forcing them to view it before a video stream.

Takeaway. One of the most attractive aspects of video-in-video advertising is that the spot itself can be the same commercial run as on television, so it offers economy of scale. But the attraction doesn't stop there. A March 2007 Burston-Marsteller study showed that the same video ad shown online has dramatically higher recall rates than it does when run on television, 77 percent compared to 18 percent. Further, a YouTube study found that video-in-video spots have five- to 10-times greater clickthrough rates than standard web display ads.

"Over time the ways in which advertisers will talk to consumers and use video is going to be change, by audience and by advertiser," says Brad Feldman, COO of Panache, which offers technology that can take any ad format and deliver it into any video stream, regardless of player format. "Every company will be able to actually create the unique consumer experience they want to create, and whatever the effective means is to deliver their message we're able to allow that into the stream."

Conclusion
Although we've covered a lot of ground in this article, it still doesn't even scratch the surface of the options that are available to advertisers or content producers. As advanced and all-consuming as the internet has become, new technologies are appearing every day, and companies are still experimenting to figure out how to really make video ads as interactive and effective as they can be. There still are no creative standards or proven measuring tools. But marketers can't let all the uncertainty slow them down, because consumers have spoken, and they are online for more hours a day than they watch television.

Television advertising is a $65 billion market in the United States. Online advertising currently amounts to less 0.5 percent of that amount. But those numbers are expected to change very quickly. In fact, a recent eMarketer study indicates that a whopping 86 percent of advertising executives expect at least 10 percent of their TV ad budgets to move to online video by 2010. So three years from now online video is going to be a $6.5 billion market.

Interactive marketing is an increasingly vital element to almost any advertising campaign, so best to start acclimating yourself with some of the incredible branding opportunities available now. Just remember that despite the fact that ads are going high-tech, Advertising 101 rules still apply. Combinations are more effective than one-offs for a complete campaign, so using a skin with video-in-video spots is likely going to offer better results than either format on its own. Know your audience and engage the people by marrying your campaign to the right content. Just because you can get street cred by having a flashy, groundbreaking online advertising campaign, not every brand is best suited to be associated with unfiltered content created by a 16-year-old with a video camera.

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