Listen to some of the breathless commentary around online video advertising and you'd be forgiven for thinking that the sector is in rude health.
Indeed, according to the Interactive Advertising Bureau's latest study, online ad revenue enjoyed double digit growth this year. This has led to pre-roll inventory being regularly sold out, creating a boom for both publishers and advertisers alike.
But this is a fool's paradise. Recent research has shown that around 54% of online ads are not seen by their intended audience, undermining the buoyant industry reports elsewhere.
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The problem isn't that the ads are missing the mark – in fact, quite the opposite in many cases – it is that there is a fundamental disconnect between consumers and the viewability of ads. This stems from a number of issues, but given that comScore has found that around 50 per cent of web ads currently go unseen, it is clearly a major focus for the future.
2014 - The Year of Online Video Advertising
Quite simply, online video advertising is ripe for innovation. The good news is that 2014 looks set to be a landmark year for the industry, with several key areas promising to help make great strides in making video ads more relevant, more viewable and ultimately, more useful for consumers. Here are our top predictions:
- Video comes of age for merchants – Retailers have had a tough few years, and competition for the consumer pound is stronger than ever. Video is now the key part of any brand's consumer research and 2014 will be the year when online merchants finally recognise the value of video as one of the fundamental sales channels.
If advertisers/ecommerce companies can connect interested video viewers with their ecommerce platforms when they have that purchase intent, they can give consumers a direct way to take the natural next step in their consumer journey.
- Mobile internet goes supersonic – The days of seeing that little "E" next to your phone's signal strength bar are numbered. After a soft launch this year, 2014 is set to be the year of 4G. Widespread roll-out of the hi-speed mobile internet service by multiple operators will bring ultrafast data downloads to the masses. 4G will revolutionise consumer access to, and consumption of, online video, leading to a renewed focus from advertisers on quality content, rather than quantity.
- Publishers will finally join the digital party – Yes, many media organisations have made good inroads into digital over the last five years. Indeed, the Guardian is arguably the most progressive and successfully digital media organisation in the world right now
- But until now, not every publisher has appreciated the benefits that digital advertising can bring. This is set to change next year as 2014 looks to be the year when publishers start properly investing in their mobile strategies. Those at the forefront of innovation with develop a robust mobile first strategy on top of their digital first strategy, ensuring that their readers' experience is as good on mobile devices as it is on the desktop.
Underpinning each of these predictions is a wholesale change in the way both publishers and advertisers approach online video advertising.
The fact is, video ad models in their current format are no longer relevant, and the future of video advertising is contextual, not personal. In 2014, publishers will start to mine their vast repositories of inert content and turn it into a dynamic source of ongoing revenue. Existing video content becomes new inventory, creating an entirely new revenue stream at no extra cost to the publisher.
Meanwhile, advertisers benefit from sophisticated targeting and segmentation that allows brands to direct consumers to useful products and services that are contextually related to what they are viewing. 2014 is set to be a landmark year for the online video advertising space, and I couldn't be more excited.
- Irfon Watkins is CEO at Coull.