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• 18-Mar-2010 by John Moulding
• Broadcasters can triple online ad revenues
• Convergence TV

Broadcasters are under-monetizing their online video and could treble their advertising inventory and revenues by taking greater control of their advertising formats and campaign rules, according to Sorosh Tavakoli, Founder & CEO of Videoplaza . The company, which provides an ad server solution for online video, has just completed a EUR 3.5 million round of investment led by the Nordic venture capital firms Creandum and Northzone.

The Videoplaza platform enables online video publishers to monetise their content regardless of where it is being consumed, whether it is on the publisher’s own site or syndicated to third-parties and across a range of emerging devices and platforms. The company is currently serving all the in-stream advertising for Sweden’s TV4, mainly through the TV4play free ad-funded catch-up service.

Videoplaza also counts Kanal 5, Sweden’s third largest commercial TV-station, owned by ProSiebenSat.1 Group, as a customer. The company claims to have been responsible for a three-fold increase in their advertising revenue around online video, partly by adding overlays to the existing pre-roll offering.

Based on experience, Tavakoli believes other broadcasters could also deliver far more advertising to online viewers without deterring people from watching. It seems that if the content is good enough, consumers are tolerant of longer pre-roll advertising insertions as well as overlay banners that can cover as much as one-fifth of the screen for short spells, and also interactive banners that accompany content.

The challenge, according to Tavakoli, is to provide broadcasters with control of their own advertising and the flexibility to change the formats and campaign rules as required, as well as provide dynamic and targeted advert insertion. This is made possible by Videoplaza’s Monetize, an ad server that manages, displays and tracks online video advertising and provides campaign reporting. Videoplaza integrates this technology into video players and major online video platforms.

Videoplaza’s CEO says advertising formats and business rules have been hard to change previously because they are hard-coded into the video player but the Monetize product means content owners can dynamically change advertising rules. So the number of adverts during the pre-roll session or mid-roll break can be changed, and advert breaks can be defined by their length of time rather than the number of advert streams inserted. This means content owners have more flexibility to balance the advertising load against the user experience – including increasing the amount of advertising against long-form content or reducing it for short-form content.

The advertising load consumers are expected to bear can also be determined by the time that has elapsed since they last saw any advert from the content owner across all their content. This means the ad serving intelligence has to stretch across different video streams. If someone has watched a pre-roll advert and switches to another stream, the business rule could insist that they do not see another pre-roll on the new video stream but wait for a mid-roll break. Rules could be set up to state that nobody should see an advert if they have viewed one in the last three minutes, whatever they are watching, for example.

“You need to work with different advert formats and balance the user experience and the amount of adverts that are presented to people. That needs intelligent and dynamic tools,” Tavakoli explains.

He claims the Monetize ad server solution is ideal for broadcasters who are syndicating programming to online video aggregators (like YouTube). “Broadcasters do not want anyone else selling advertising around their programmes and they can use our product to monetise their content wherever it goes – including through syndication. Currently a broadcaster selling its own adverts will still send the campaign details to the aggregator, who sets up the campaign in their advert serving platform.

“We would integrate with that advertising platform, which we have done already, so the broadcaster can serve their own adverts into the aggregator with their own technology. That gives them full control and transparency.”

In this scenario, when someone requests the syndicated video at the aggregation site, an advert request is sent to the broadcaster’s ad server, which then decides on-the-fly which advert to deliver. “This control and flexibility will help the industry grow because if they can achieve that level of control, publishers will be far more open to sharing that content on aggregator sites like YouTube.”

Tavakoli expects nearly all online video advertising to be targeted depending on demographics or campaign rules, which could be based on intelligence about what adverts have already been served. And on the subject of whether there is a backlash against advertising-based online video models, and a desire to bundle premium video with Pay TV subscriptions, Tavakoli suggests: “If you can do it without advertising, then great.

“The best way to monetise content is to charge for it but unfortunately you cannot get people to pay for everything so there is a big opportunity for the business model where you give people the content free and sell those eyeballs. In the traditional television world it is a 50/50 split between paid and advertising funded content and I think we will see the same online.”

Online video advertising business models will form an important part of the agenda at this year’s Future TV Advertising Forum , held in London, December 2-3, 2010.

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