A lot of experimentation with video advertising on the Web is going on these days. There are interactive overlays, contextual text ads, video-in-video, video banners, ads that take over the whole screen, and little icon bugs that crawl along the bottom. What you’ve probably all seen the most of, however, is the plain video pre-roll that mimics a traditional TV commercial, even though everyone knows it’s not very compelling.

So what does it all mean and what are the implications for business?

Well it means that a whole new raft of advertising tools have just become available, which are well and truly geared towards the TV-loving, hard-to-impress consumers of today.

Product Placement

In the past Hollywood movie or television producers and game creators have been the only ways for marketers to get product placement of any real value. Placing a can of Coke or Pepsi in a blockbuster movie or headlining brands like Adidas in video games has reach that cannot be matched with simple display ads or cross-platform campaigns. Monetized video is changing that.

Here is how the system works: a company’s products or brands are matched to clips being produced by independent video producers who want to monetize their content.
Marketers tell producers what requirements they would have before their products are chosen for placement. From there, cost (CPM basis) is discussed and then video producers skim through the list of campaigns to determine if there is a match.

You can even get your products included in video games. Chrysler bought itself a starring role in Activision’s The Movies, which lets players write and produce their own films.

Chrysler screen in Activision's The Movies

Clickable Canvases

An Israeli startup called Innovid is doing its part to help advertisers move away from the bog standard pre-roll video with technology that allows for things like virtual product placements inside videos and turning entire surfaces into clickable canvases. In a demo video on their site you’ll see different advertising effects projected onto the walls of a room, from a Pong game that you can play to a RSS feeds running across the baseboard as a ticker to funny creatures whose eyes you can move with your mouse. www.innovid.com
In terms of practical uses for advertising and product placement, here’s a still from a video before and after the placement treatment.

Innovid product placement

Zunavision offers a similar service – in their own words “We enable content owners to assign ad-spaces inside the physical space of their videos, ready for advertiser branding.” They add that the videos are managed by the user, have no pre- or post-production, no screens and more importantly that they are not one-shot wonders. Each video would feature dynamic, re-sellable ad-spaces.

Business implications

Imagine the possibilities for big streaming events like the inauguration of the US president. Advertisers would have a whole new medium which could be cheap for them and hopefully not-that-annoying to viewers. Imagine seeing an actor drink a Pepsi in a movie and being able to click the Pepsi can in the video and be sent to Pepsi’s site.

Technology such as this could have a major impact on SMEs as well as the big blue chips, in that it could enable some really cool scenarios where advertising is embedded within content and a context that buyers would really care about. Examples off the top of my head -  a garden centre embedding links to gardening tools in a how-to gardening video; a video of a catwalk show and you click on the dress or shoes to buy them; a film for a dog rescue centre where you click on the animal to sponsor it . It will be very interested to see examples of this working in the market.

One step beyond

Overlay.TV also allows users to create hot spots on their videos and photos  but it was also starting to see a greater demand from developers to create rich media experiences using the technology.

With over 750 affiliate partnerships, the company provides its users with thousands of products to promote within their content. “We’re starting to get a clear picture of what is working and what is not…some content creators generate click through rates at 6% and engagement rates in the 16% range and some fall at the very low end of the spectrum” said Ben Watson, VP of Marketing

There has been a lot of product development going on at Overlay.TV over the past year. Most recently, Overlay.TV announced that it would open its API to software developers so that they could build engaging video experiences. The tools offered include applications, widgets and other customized solutions to enhance the interactive features of online video and here are some of the ideas they’ve come up with:

Product Endorsement Videos – As an example,  Overlay.TV has partnered with famous vlogger and social media expert iJustine to produce various product endorsement videos, with a tongue-in-cheek tone, where creators have the power to literally put products in iJustine’s hand.

Karaoke – Kids can use this application as they do on Kidz Bop to sing along to their favourite songs using lyrics “Overlayed” in the music video, and their sing along appears right inside the video itself.

In Game Video – One thing that is currently missing from in-game videos like World of Warcraft is player stats, and serious gamers always check out stats. This widget combines data and video so gamer stats are integrated with the video.

iXLd – A tool for creating free band websites which includes integration with XLSuite to provide a fan club-building platform along with the video benefits of Overlay.TV’s technology. Bands have five free design options to choose from.

Disney implemented a sing along feature to their Jonas Brothers site allowing fans of all ages to record their voices into the sound tracks and submit their masterpieces to be posted on the Jonas Brothers’ wall of fame.

Jonas Brothers singalong video

•    54% of the users that visited the Jonas Brothers site hit record and created content.
•    10% of those users went on to create two or more recording after the first one. Fans started to invite their friends and use the tool as a new type of video game.
•    8% of the users ended up submitting content to the Jonas Brothers site in hopes that it would be posted.
Disney’s investment was minimal as the content was footage from a previous recording.

To date, advertisers have largely viewed video as a media that could be distributed online. Slap it on to YouTube, promote it through search and hope it grows wings. The Disney application of Overlay.TV tools changes the distribution content to an interactive one and shows what can be achieved with a little imagination

Ok, so we know that video marketing works for Disney, but how does it really work with less ‘sexy’ businesses? Well, it’s early days but it seems as though lots of organisations are embracing the technology. One example is US Tax company H&R Block.

Now read a Case Study to see how H&R Block use interactive video, plus comments from three North East providers of interactive and viral videos.