One of the most compelling stories in online video right now is that of how to make money providing the service. While giants like Netflix (Nasdaq: NFLX) and Amazon (Nasdaq: AMZN) have built-in customer bases, other online video providers like Hulu and Google (Nasdaq: GOOG)-owned YouTube are struggling to find a balance between their sites' popularity and their profitability. New media is relying on old media's cash-cow standby, advertising. But how can it get those ads in front of a connected generation most effectively?
In our latest feature, Fierce editor Mariko Hewer takes a look at three advertising models for online video. The multiplatform flexibility, immediacy and interactivity that IP-based video provides has changed the way advertisers approach the audience.
A few years ago, pre-roll advertising appeared on YouTube and other video sites. Mid-roll and post-roll have gained steady ground as OTT providers like Hulu have created a platform for longer-form video content. The approximately 12 million viewers of the Crackle channel typically see ads throughout their selected feature, as Eric Berger, EVP of Digital Networks for Sony, pointed out in a recent Hot Seat interview.
Interaction with ads is a feature that has also been around for a few years, but advertisers are giving viewers more options to do so. For example, as the feature illustrates, Hulu users can choose which ads they want to watch. YouTube viewers can choose to skip an ad after a five-second interval, although shorter, 15-second advertisements generally don't have that feature (and appear to be gaining traction with advertisers).
These options and other opportunities, combined with nonstop growth in the online video audience overall, mean online advertising spending will continue on an upward track for some time. Can companies maximize their return on that ad spend? Stay tuned.--Sam
Read our special report, New advertising formats, timing could help monetize online video advertising, here