Net video ads: Attention vs. annoyance

By Anick Jesdanun

updated 1:59 p.m. ET March 17, 2008

NEW YORK - Frank Harper is well aware that all those free video clips on the Internet come at a price: advertising.

But that doesn't mean he sits idly as short video ads precede many of the dozen or so clips he watches each day at sites like Microsoft Corp.'s MSN.

(MSNBC.com is Microsoft-NBC Universal joint venture.)

"For the most part, I just mute the volume," said Harper, 55, who runs a security consulting firm in Sterling, Va. "Or I just look at something else, look at another headline ... or go to another site while the thing is playing."

Marketers and Web sites alike are struggling to bring to the Internet ads that resemble television without turning off viewers the way TV ads often do.

Spending on online video ads represents less than 4 percent of all Internet advertising and just 1 percent of the amount spent on TV, according to eMarketer. But growth is expected — with the research firm forecasting U.S. spending more than tripling to $4.3 billion in 2011 — especially as more viewers embrace full-length TV episodes and other video online.

The challenge is finding the right formula — in the creative approach, the format or the frequency with which the ads appear — so visitors notice the pitches without getting so annoyed that they never come back.

"Users love free content and advertisers love to fill up every minute and pixel with the messaging, and publishers do have to find that balance," said Geoffrey Coco, an advertising executive with Microsoft, which has a video news partnership with The Associated Press. "There's been a lot of innovation but I don't think we've settled down yet."

The results so far have been mixed — even when sites force viewers to watch video ads by making them impossible to skip.

Viewers "are grabbing the status bar, trying to click it ahead or further along, and while they are figuring out how to skip the ad, they've missed the ad," said Jonathan Sackett, chief digital officer with the Arnold Worldwide ad agency.

And some studies have shown that many viewers abandon the video completely if an ad appears. Yankee Group senior analyst Daniel Taylor said sites that insist on "no ad, no video" risk losing frustrated visitors to rivals forever — along with future ad opportunities.

Google Inc. and other search companies have generated billions of dollars from text-based ads that appeal primarily to merchants seeking a direct response, such as an immediate sale.

But for companies more interested in longer-term brand promotion, video could make a much more lasting impression.

"It's emotive, rich. It grabs your heart," said Suranga Chandratillake, founder of video search company Blinkx PLC. "It combines all that is great about TV advertising with all that is great with online advertising" — the ability to more accurately track who's watching, when and for how long.

Although many advertisers are simply repurposing television ads as online "prerolls," a few are trying to break from that mold with ads that are more interactive.

MORE FROM INTERNET

Internet Section Front

It's art, for the Facebook generation   FCC may punish Comcast over Web blocking Bikers, pedestrians seeking better Web maps Clicked: Twilight of the blogs China says Web users top U.S. at 253 million Is your ex a con? Boy loses battle over 'Narnia' Victim of fake Facebook profile wins suit Britain launches fight on music piracy Creators of Scrabble knockoff on Facebook sued Internet Section Front   Add Internet headlines to your news reader: