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TESSA WEGERT
From Thursday's Globe and Mail
As advertisers keep seeking new ways to grab the attention of consumers, they've found a combination of television and the Web tough to resist.
On-line video advertising — TV-style ads that are delivered over the Internet — are exploding in popularity.
According to interactive media research firm Jupiter Research, advertisers in the United States spent $77-million (U.S.) on on-line video ads last year. That number is expected to increase fivefold to reach $657-million by 2009, and similar growth is happening in other countries, it says.
“On-line video advertising is quite popular,” says Patrick Tapp, an account executive with Montreal-based site publisher
Netgraphe Inc., whose properties include Canoe, Autonet and Jobboom.
Mr. Tapp sells video ads to such Canadian advertisers as home improvement retailer Rona Inc., broadcast company Alliance Atlantis Communications Inc., and French film companies Christal and TVA Films. He estimates that video ad spending within his network has tripled within the past year.
Netgraphe is the Canadian distributor of video ads from media developer
EyeWonder Inc., which along with rivals
Eyeblaster Inc.,
Klipmart Corp.,
PointRoll Inc. and
Unicast Communications Corp., introduced new video ad formats this year. The ads, which can appear in small windows or full-screen, often employ Windows Media or Macromedia Flash technology. Some are user-initiated, while others are interspersed within video content or appear to users as they surf from page to page.
Although on-line ad units that incorporate video have been available for several years, 2004 has been a banner year.
“About 30 per cent of our [450 million monthly] impressions now include video in some way,” says Gal Trifon, chief executive officer of Eyeblaster. “Advertisers are ready to spend.”
Mr. Tapp says the appeal of video lies in cost and consumer reach.
“There's value in on-line,” notes Mr. Tapp, who also sits on the Quebec council of the Interactive Advertising Bureau of Canada.
Companies with existing TV ads can virtually eliminate on-line campaign production costs by converting commercials into digital files for the Web. Couple that with the high level of broadband Internet adoption, particularly in Canada, and you've got an appealing format.
But in spite of its current popularity, there is some concern that video ads could suffer the same fate as the now-reviled pop-up. Some formats can be slow to load, causing problems for narrowband users.
Netgraphe says it has yet to see evidence that its own users are irritated by the ads.
“We have run tests using various connection speeds, including dial-up,” Mr. Tapp says. “We have not had any problems or complaints. To the contrary, when we launch a new, awaited video campaign, we'll notice a peak in traffic where people come to watch the ads.”
To decrease the likelihood of annoyance, Netgraphe also uses “frequency capping,” a method of ad delivery that strictly limits the number of ads each Internet user receives. “We might be more lenient in a showbiz environment and cap the ads at two to three per user, but in a business or news environment, caps are set at one to two,” Mr. Tapp says.
Consumers may also be mollified by the newest bandwidth-friendly video ad technology that offers broadcast-quality commercials at 30 frames per second, just like TV. Unicast's Video Commercial, for example, delivers full-motion video that can easily be viewed by consumers regardless of connection speed.
So long as Internet users continue to respond to the ads, it's likely we'll be seeing much more of them.
“There are some skills that need to be acquired by agencies, and it will be up to the sites to create the inventory,” Eyeblaster's Mr. Trifon says. “But we've only seen the beginning of this industry yet.”
Special to The Globe and Mail
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