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Online video advertising

Chris Bunyan looks at how online video advertising can help regional publishers.

By Chris Bunyan

We all know that regional publishers are currently in transition. On the one hand, driven by a growing interest in local web content, the online audience for regional papers grew by nearly 25 per cent over the second half of 2010. On the other hand, print circulations are dropping, along with corresponding advertising revenue.

Most regionals realise that innovation and new services are the keys to digital success, which is why they are experimenting with a raft of new ideas to attract and retain consumers and drive revenues.

One opportunity is to try to home in on the growing interest in online video advertising and exploit the popularity of video, local targeting and faster broadband connections to create a new revenue stream.

Online video advertising is expanding rapidly – up from just £30m in 2008 to £440m in 2011 according to AOP. And most experts expect it to remain one of the fastest growing areas of digital ad spend for the next few years.

One of the reasons for this is video’s effectiveness – video ads typically have click-through rates three times higher than traditional online ads, with research showing that over 50 per cent of consumers then go on and take further action.

Most of the online video ads that appear in YouTube videos or on national newspaper and consumer lifestyle websites are extensions of national broadcast TV advertising campaigns or part of wider integrated marketing campaigns by big brands. They tend to share the glossy production values of TV advertising – and the correspondingly high costs.

But this type of video ad campaign is obviously beyond the budgets and timescales of the small businesses that make up the bulk of advertisers in regional media. Regional publishers rely on selling high volume, affordable ads at low prices and working on tight margins. What they need is a way of harnessing the power of video, tailored to the needs and budgets of their advertisers.

Consequently, most regional publishers who have introduced video ads, have turned to automated online services that allow them to generate affordable adverts based on professional video libraries.

Using this kind of offering, which can be integrated with publishers’ own ad booking/ad serving systems, it is possible for sales teams to quickly and easily plan and create video ad campaigns for customers. They can choose a sample video advert, whether it is for a skip hire company, a car dealer or a florist, and personalise it with a customer’s logo and contact details.

This approach is simple and fast for the advertiser, who can see a professional quality video ad for his or her business delivered within minutes - and equally easy for the publisher as it doesn’t involve complex ad creation, specialist studio time - or a big investment in new resources. And of course it dramatically brings down the cost of video advertising.

Most regional publishers who offer this kind of video ad, will run them as in page ads on their web pages. They tend not to charge a separate video production fee, but roll the cost into the display fee, which could be cost per thousand (CPM) based or simply based on the number of days or weeks the ad remains on the site.

The challenge for publishers is how to get their traditional print based advertisers to transition to video and other types of digital advertising.

Very often regional advertisers are unsure of what they are going to be buying, having had little or no experience of digital ad formats. However one of the benefits of automatically generated video ads, is that customers can very quickly see a sample ad for their company. A sales person can create the ad and email it to the advertiser while they are still on the phone.

Being able to see what you’ll be buying can be very persuasive and take up rates from this approach can be very high. Especially when small businesses are encouraged to use the video content in other ways – such as putting it on their website or blog, sharing it on Facebook and incorporating it in email marketing campaigns.

Another way to encourage the trial of video and other digital ad formats is to offer traditional print advertisers combined packages which roll up video ads with print campaigns. A number of regional publishers have seen success with this approach.

And because the automated ad creation systems can generally provide data such as the number of plays and click-throughs a campaign has generated, advertisers get a good senses of the effectiveness of video, which encourages repeat campaigns.

Regional media publishers are at a crossroads – looking for new revenue streams that exploit their local leadership through digital channels but without having large amounts of capital to invest. Online video advertising is one way of moving them forward, providing a simple, efficient way of generating revenues and enabling them to benefit from the power of video with minimal capital investment.