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Think BR: Online video - welcome to boom town

Video has moved well beyond 'test & trial' strategies with agencies and advertisers now looking to become more sophisticated in their usage of the medium, explains Rhys McLachlan, business development director, Videology.

Rhys McLachlan, business development director, Videology

Rhys McLachlan, business development director, Videology

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This may be a tough year for some media but online video is booming. Across the industry, indications are that growth has been around 60-70% in the first quarter of 2012.

The business has moved well beyond the test and trial phase of the early years and agencies and advertisers are not only content to make investments via this channel, they are asking questions that indicate that they are ready to do more with the medium.

Advocates of online video could sit back and think all’s well. Revenue will continue to grow as more and more advertisers and planners see the success that competitors are having and react by allocating more spend into the medium.

But there is still a long way to go. The challenge now is to move towards the next step, consolidating existing spend and helping the most advanced advertisers and agencies to do more.

Phase two for online video will focus on four key areas:

  1. It means using video advertising on more devices. Consumers are using more and more devices, from tablets to mobiles to access video content, with reported consumption on mobile devices up 91% in Q1 2012 over the same period 2011. Advertisers need to understand this transition and move with them.
  2. It means utilising more messaging formats. As more publishers adopt VPAID industry standards, our ability to create and deliver standout messages will only increase. VPAID will enable advertisers to select from a varied menu of click-activators, geo-localisation, social-share, buy-now solutions. The development and deployment of these emerging formats will give communications more power to engage and deliver for advertisers.
  3. It means smarter targeting. Many advertisers and agencies still need to move beyond the use of TV demographics when they invest via addressable platforms such as Videology. Think Main Shopper aged 28 – 32 with pre-school kid who regularly purchase cereal on BOGOFs rather than 25-35 Housewives with Children. By shifting to a more bespoke, customised target audience, advertisers will improve efficiency.
  4. It means a greater degree of personalisation. Addressable advertising platforms allow brands to personalise the message they sent to consumers based on a number of different factors. We’ve recently run a campaign for Alfa Romeo in which all messages, including a map and address for the local dealer, are based on the IP location of the viewer. This is just the start and brands can use an extensive list of factors beyond location, including car marque ownership, preferred alcoholic drink and even ‘fashion tribe’ to customise the message they send.

For those advertisers and agencies that are already working on these four areas, the next step will be to explore the potential for connected TV.

As more and more of us buy the latest TV sets and start watching internet broadcasts from the likes of YouTube, 4oD and Demand 5 we will be able to personalise more and more ad breaks.

This is in addition to the great work being developed by Sky to support their ‘direct-to-the-set’ AdSmart product.

Sales of connected TVs are set to hit 36% in the UK by 2014 giving us an installed base of nearly 10m sets.

With almost every TV sold now coming with this functionality, addressable advertising is extending well beyond classic digital devices.

Boom time for addressable advertising and online video is here to stay for sometime to come.

Advertisers and agencies need to work with their technology partners to stay on the cutting edge of this fast changing medium.

Rhys McLachlan, business development director, Videology

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