There's something wrong with online advertising. Still in its relative infancy, online ads are now a major segment of the advertising industry. But do they offer value to brands and a good experience to users
Globally, online is the fastest growing sector there out there, expected to grow to $83.2 billion (£52.3 billion) in 2012, or 18 percent of the total market. However, there remains a serious question over whether ad formats have evolved to meet the needs of advertisers or create a good experience for users.
As part of a new series on TheMediaBriefing - What's wrong with online ads? - I'm speaking to technology providers and entrepreneurs with ideas to improve the online ecosystem.
First up is the pre-roll video ad, quite possibly the least innovative of all online ad formats in that it's lifted directly from TV and plonked on the internet for unsuspecting YouTube users. Video has a long way to go if it's to stop being TV's little brother, at one or two percent of TV's spend.
Countless studies have found that users don't like it, that click-through rates are low and completion rates are lower. Molly Wood, executive editor at CNet, hits several nails on the head on the need to avoid "brand rage" in users seeing the same video spots again and again and again.
A skippable solution?
SpotXchange, the real-time video advertising network, has developed a product - Skipit - that allows users to skip past pre-roll video ads. Users either pay a small amount via pre-bought credits or pay by promoting the brand via a tweet or a post to their Facebook wall. It might sound far-fetched, but the high level of abandonment and low conversion rate when it comes to pre-roll vids strongly suggests that something is up with video ads, despite the growth.
I met with SpotXchange CEO Mike Shehan to find out more...
And here's the Skipit product demo video: