Thursday, 26 November 2009

Video Advertising Isn't Going Away, It's Just 'Growing Up" Online...

As I've posted before in "TV Ads are Going to Fragment," more evidence from eMarketer, as if we needed it, demonstrating that the creation of video advertising isn't dead, or even in decline -- we were just waiting for the bandwidth and delivery systems to get up to speed.

Online ads with 'rich media' get almost double the 'dwell time' (watching time):




My point is only that the technology is finally sufficiently advanced that agencies can now get really creative (see the Mac vs. PC video display ads) and truly engage websurfers with video that "pulls".

What this suggests is that all those 'digital agencies' and 'experiential agencies' who have been largely executional in what they produce to date are either now going to have to step-up their creativity (AND strategic planning/thinking capabilities) with the type of Creatives the dinosaurs have traditionally employed, or will get stuck with executing what the dinosaurs feed them, as the latter see the opportunity and begin generating rich media ads to play online.

We're at the tipping point, the next big change that is about to get figured out is how to monetize the placement of rich media ads to the point where agencies can once again make the big bucks they used to from TV ad placement (15% of the media spend).  I think the winners are going to be the agencies who "get it" and walk away from the old broken commission model, accept less repetition, MUCH lower frequency rates, and MUCH, MUCH lower revenue from media.  These winners will focus on convincing clients to adopt a 'shared risk, shared up-side' model based on a low retainer up-front and a big payout if ROI metrics demonstrate higher sales due to their efforts.

For this to transpire, however, it will take either a combined effort amongst the oligarchs (WPP, Omnicom, Publicis and IPG), which is unlikely, or at least a risk-taking push by one of them to be the leader.  If they don't, the upstarts may just leapfrog past them and their relegation to 'dinosaur status' will be complete.

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