BUSINESS BLOGS
BUSINESS BLOGS
category: business
22 Feb 2007

FT is one of the most respected and serious newspapers out there, so calling them a ham is downright blasphemy, but I am trying to make a point.  Yesterday I wrote a lengthy post on why Online TV / Video Studies are Misguided and Wrong even going as far as to say that respected, mainstream media will jump on such erroneous misguided reports without testing them against history’s lessons.  In that post, I extensively compared the folly of saying that consumers will pay $0.10 per story or a $1 for an online edition of a magazine blah-blah-blah.  Maybe it’s because the micropayment ecosystem never took off, but let’s be candid here: that was plain wrong.  People don’t want to pay anything for content.

All to say, the next day, a respected FT writer (smart and sincere otherwise I am sure) picks up the report and runs with it.  Some in the circle simply question it, others come out and like me say that such a report is plain wrong.

Frankly, I think it’s nuts that online ad video estimates mothballed from $500M by 2010 (set in 2004) to $3B by 2010 (set late in 2006), but the fact remains that we are seeing the future of online video advertising and online video content in a “blinds-are-closed” manner.

Here is what I think is the future of online video and content:

Believe it or not, the video ad will actually be found on plenty of places but alongside text content.  Think about it, unlike blogs which are usually short, text content tends to include 500 words per page so readers scroll down.  In other words, the 728×90 leaderboard at the top of a page and the 300×250 billboard ads are quickly passed by… over time, advertisers will realize that the most effective format above, along or underneath text content is a mute video (consumers will shun automatic-played-audio so that will join popups).  This is what you already see on sites like Yahoo!

In other words, I agree with some that the pre-roll will die, but not for the reason they think.  In other words, a video ad before a video clip will not prove successfull; a quick image before video will succeed, but ultimately, what will drive video content is higher CPMs for display/banner ads alongside your video screen.

Think about it folks: if I sit through a 1-3 minute online video, I am already accustomed to doing everything OTHER than watch a pre-roll in the instant before the main video content starts… but once the video starts, I am pretty watch watching tentatively one screen and am NOT scrolling down.  So in this context, unlike how quickly display/banner ads disappear, a banner/display ad alongside a video box - ie. the “companion” ad - bears high value.  In fact, some publishers will test refresh ads that change after 30 seconds, for example.

All to say, I run a digital media company called Mojo Supreme with a plethora of assets, one of which is a Web TV company (WatchMojo.com) who produces original video and I think long term I will generate more video ad revenue from the text-based properties and more display revenue from the video properties.  This won’t happen overnight, but in 1, 3, or 5 years, I would sit through an episode of the Nanny myself if I am proven wrong…