2011 Prediction 6-9 Trillion Display Ads Seen by 45 People

comScore today announced that in the third quarter of this year (3Q 2010) about 1.3 trillion Internet display advertisements were served to people in the U.S. (a 22% growth from the same period in 2009).

We were too lazy to register to download the report, but not so lazy as to avoid making “wild, unfounded generalizations and predications” based only on that one piece of data…

  • In 2011 6-9 trillion display ads will be seen, with a 32% growth in online-video ads.
  • More than 95% of the ads will never be seen by human eyes
  • Of the 5% of ads that are actually seen in the U.S., 54.7% of those won’t be in the U.S.
  • Just 45 people will see the ads: a staggering 95% of some previous subsegment of the 6-9 trillion ads served.
  • 76.4% of the remaining ads will be seen by high-school kids ages 12-18 who impact .04% of the gross domestic product.

Now here’s what the report will really offer, with italics in my words.

  • The story behind Facebook’s staggering growth (everything edited out of Social Networking: the movie).
  • New strategies and innovative ad sizes offered by publisher (words like “target” and “accountable” and “ROI” will be included, and some sample ad formats will show how to be advertisers can ride publishers like a drunk Texas cowboy on a wounded Mexican steer).
  • Category-level trends and insights (both industries covered: financial, travel AND consumer-packaged goods).
  • Advertising success stories of mid-sized and niche publishers (including data that’s so powerful it’s almost as real as the 3D Yogi Bear… but less interesting).
  • Tools to generate more sales leads and evaluate competition (tricks like “put together a white paper, demand registration, then call the person 5 times in the next consecutive 11 days”).

Oh I’m just teasing comScore. But about the lower-case C…

AppleTV vs. iTV vs. Roku vs. TiVo vs. WTF?

The iPin is AppleTV's latest model, and it's smaller than a grain of rice but 32.5% larger than Plankton from Spongebob.

I’m a long-time advocate of the AppleTV, and intrigued enough by the iTV that I’ve got one on route. So what’s the difference, you ask? First check out Ryan/NewTeeVee’s coverage of AppleTV vs. Roku vs. Boxeee. Liz/NewTeeVee provides more in-depth coverage of the AppleTV/iTV.

So there’s no iTV. It’s just a new version of AppleTV, where the price of the unit was slashed in third. At $99 you won’t likely find a smoother interface to stream your content… assuming it’s as user-friendly and fast as AppleTV’s earlier model (around $300 with some room for storage).

We like the lower entry price making it an impulse buy, and the 99-cent rentals of television shows we miss — despite our best attempts via TiVo or the vintage DVR you’re using because you’re the cable company’s little bitch.

Until now we were buying assloads of missed television shows at twice that price ($1.99), and that’s a bit bloated for a 23-minute show (but certainly fair for an 45-minute show). We’re talking about decent HD, no stupid pre-rolls, an easy interface, and easy purchasing via the credit card Mac has on file. And for 95% of the shows we bought, a rental would be fine.While we’re not happy to see episodes costing $2.99 to own now, we’re hoping that our old AppleTV enjoys a software upgrade that makes it a new one. Otherwise we feel screwed. Except “The Office” and a few other shows, we don’t need to own in a reasonably priced “on demand” word. Wait that’s a drop quote.

We don’t need to own in a reasonably priced “on demand” word.

I find it perplexing that the unwashed masses are only beginning to adopt these things. We’ve got a Roku that’s not used often except for occasional Netflix viewing. The TiVo is the primary device because it plays live Verizon Fios without subjecting us to the horrible Verizon machines… TiVo also allows us to “subscribe” to YouTubers like “Obama Girl” and “Rhett & Link” and “The Onion” and “College Humor.”

Maybe I’ll do a little video demo when I get the new AppleTV because I read Scoble’s tweet that we can use our iPad as a remote to the new AppleTV, something that didn’t seem very easy with the old one.

Bottom line:

  • AppleTV is different in two ways. Cheaper unit ($99 not $300), and now you can rent all that television you missed or if you’re still not paying for access to premium channels because you’re a cheap bastard like me. Wait that made no sense. I’m probably paying more by buying these shows.
  • More choices (in hardware and vendor/price options) means a more confused marketplace but more attention by the mass market. Only one or two will survive, and you’re going to be getting lots of questions from your parents in the next few years. At least there’s no flashing 12:00 to worry about.
  • I’d predict that these will be mainstream by the fall, but I’m a bit gun shy making that prediction a 5th year in a row. I can’t even remember how I hedged this subject in my book, which is coming out in a week or so.
  • If I talk about my book too often, please tell me. I have seen authors do that, and it’s revolting. If I’m walking around with spinach in my teeth, you’d say something right?
  • How the heck did Netflix secure its space in this evolution? We thought they’d be Blockbustered.
  • It doesn’t bother me that only two people read my blog carefully.
  • Seriously- give me one good reason NOT to have a friggin’ Roku/Netflix/TiVo/AppleTV in your house? Sure it’s a few more devices and subscriptions, but we think this Onion spoof on Blockbusters is a reality now. When’s the last time you rented a DVD?
  • Is anyone else feeling like YouTube has gone WAY to far with the pre-rolls lately?

Hulu’s “Confidential” Ad-Selector Specs Leaked; YouTube Adopts Mandatory Pre-Rolls.

Just when you thought pre-rolls were dead, both Hulu and YouTube are embracing them in recent weeks. Hulu has officially rolled out an “Ad Selector,” where viewers can choose among several ads from a single sponsor. And YouTube, whose parent Google once chastised online-video pre-rolls for causing 75% abandonment rates, is now quietly experimenting with mandatory (unstoppable) 15-second pre-rolls before professional and amateur content.

Some brief background: When I spoke to Coke marketing executives about YouTube last year, I had the dubious role of following Hulu CEO Jason Kilar. He teased Coke marketers with an emerging ad offering that’s now officially called the “Ad Selector.” He showed how Coke could provide Hulu viewers a variety of options, where the individual could chose to watch one of several Coke commercials before enjoying a free show. I was thrilled at the model because a) it gives marketers insights, b) it provides consumers with choice, and c) the mere selection exposes the viewer to several brands.

Adweek recently reported that the Ad Selector works. The article cites research by “The Pool,” a study by Vivaki, now a Publicis Worldwide company. [editorial warning: both of the referenced agency websites are horribly annoying].

VivaKi’s research examined 29 different ad models over 16 months, and had participation from such brandsas Allstate, Applebee’s, Capital One and Nestle Purina PetCare. Overall, VivaKi officials said the group invested 230,000 hours of research, surveying over 25 million consumers.

Guess what? The Ad Selector delivered click-through rates that averaged 106 percent higher than pre-roll ads. Plus, online ad-recall scores were 290 percent higher than pre-rolls.

The Adweek/Media week prompted me to “Google” for the actual research (impossible to find on the agency’s website), and I instead found this “confidential” PDF document that outlines Hulu Ad Specifications (dated December 1, 2009).

In case the good folks at Hulu decide to “reconfidentialize” that PDF, here is a brief overview: The Ad Selector is an ad unit that allows the user to control their entire ad experience during video playback. At the beginning of their content play the user will be presented with 2 or 3 category options. Once a selection has been made, the user will be presented with video advertisements in the category of their choice. For example an automotive company could offer the user a selection of SUV, Truck or Coupe advertisements. If the user selects “SUV” the remaining breaks will playback commercials from the sponsor related to just to their area of interest (SUVs).

Yey for Jason and Hulu! Jason’s talk at Coke excited me because he revealed his primary goal was to provide online-video viewers with a positive experience, and wanted to ensure that advertisements did not interfere. Here’s another happyhulu moment: last night I discovered that neither iTunes nor Hulu had yet posted that night’s episode of Fringe (which I missed while flying to Chicago). Instead, I decided to catch Tuesday’s episode of “The Office,” and instinctively went to iTunes first. It was $2.99 (yipes) and iTunes wouldn’t let me watch it on my laptop (seems I’ve exceeded the 5-device rule). So I was pleased to find it free on Hulu, and welcomed the few short interstitial ads.

So now YouTube is imposing “unskippable” prerolls (although not yet with a friendly “selector” model). This is especially ironic since Google in 2007 cited abandonment rates of 75% for pre-rolls, albeit less so for 15-second ones. AdAge reported late last year that YouTube was experimenting with “optional” pre-rolls that a viewer can skip. But Google’s Erin Bouchier reports that viewers are enduring short pre-rolls on professional content, and lately YouTube is rolling out mandatory pre-rolls on short professional and amateur content.

Do you see a skip option on this 15-second preroll on this recent Smosh video pictured below? I don’t.

Just this week I spoke with a fellow YouTube Partner who agrees with my cautious view of these: unless they command significant revenue and are proven to not cause audience drop-off, we’d prefer to turn these off. That said, neither of us has been invited to participate in this program (our options are limited to InVideo ads or adjacent banners).

15-second preroll advertisement is mandatory to watch short comedy video.

The bottom line? I’m a marketer and we need our advertising to work. I’m also a YouTube Partner and welcome models that command higher revenue for YouTube and myself. But I’m a viewer too, and I like control. Even my kids have learned to instinctively close InVideo ads (the ones that appear over the bottom 1/4 of a video), so I’m concerned about their sustainability.

My prediction is that YouTube will follow Hulu’s lead and soon give YouTube viewers a choice of ads. I would also expect that mandatory pre-rolls, if they do endure, will only work a) before highly valued video content, b) with longer formats (like 22-minute shows), and c) in very short form with 15 seconds being the maximum for 2-3 minute videos.

And, guys, I’m still rooting for an alternative to the pre-roll ad that places the 15-second advertisement inside the show. It’s not a simple solution, but it sure would help content creators engage audiences, and encourage them to sustain through an advertisement that would work.

Magical Fix to the Scorned Pre-Roll Ad!

I’ve got it! I’ve got it. YouTube and other online-video sites take notice. Free advice, peeps… to solve the ultimate online-video ad dilemma: pleasing advertisers without pissing off viewers.

Problem: We hate pre-rolls. Google says they work, but 75% of viewers drop like bodies on Fringe. We think we’re watching the wrong video, and most online-video content isn’t worth some 30-second ad. It may work for advertisers, but it’s far from user centric… It’s not a fair ratio. It’d be like being forced to watch 8 minutes of ads before your 22 minute television show (which you may or may not even like). Stats show that

Partial Solution: A smart first-step by YouTube. A split second of the video’s thumbnail shows up BEFORE the preroll. I noticed this for the first time while trying to figure out if CharlesTrippy is engaged or not. And whether ShayCarl is really moving. Anyone know? For those of you who don’t know them, you should know this. By doing daily vlogs they’ve captured a wild audience, and are constantly on top of the most-popular, best-rated YouTube videos. Trippy asked me if I’d consider the daily vlog, but honestly it’s so hard if you work full-time and my life isn’t as interesting as his. But I digress. I sense the 11 advertisers dropping off.

BETTER Solution: New format! a) Give us creators 10 seconds before the pre-roll hits (shall we call it a “Nalts mid-roll,” like my gut?). b) Then hit the 15-second ad. c) THEN on with the show. Viewers won’t adore it, but it will work better. Let me beta it on new videos, and I’ll cut my first 10 seconds with the knowledge that an ad may hit before second 11.

Why It Will Work: We creators now have 10 seconds to convince our audience that it’s worth waiting another 15 seconds for the rest of the “show.” The dropoff rate will be reduced dramatically. The advertiser is “in” the show, not blocking viewers.

Naturally this is not completely user centric. To be kind to viewers you turn off ads. But let’s keep it real here. As long as it’s free, it’s going to have ads. We viewers and we video creators generally don’t like ads. But if they’re effective, we marketers will subsidize the viewer’s experience (so we viewers don’t have to pay for content: so 1990). And we creators like making money. And we viewers don’t want to pay to see stuff. See?

The Online Ad Catch 22

Of course it’s like radar detectors and radars. As soon as the radar detectors get smart, the cops make better radars. Likewise, we get numb to ads, and many shut the InVideos reflexively (I watch my kids do this without realizing it). We stopped noticing the video ad on the top right of YouTube years ago, so now we have dancing ads all over 75 percent of the “above the fold.” It’s a bit much, and not very Googlesque. But the site’s trying to make a profit. Maybe now with Tim Armstrong gone it will change. 😉

So, YouTube… Think about what fails:

Remember when iFilm used to be hot? Like Metacafe, they had pre-rolls but not for the first video you watched. Maybe one in 3 or 4. Once they’re on every damned video, we stop visiting the site completely. I won’t watch a trailer on Yahoo Video EVER because I was once interrupted by an ad to watch the movie advertisement. On the flip side, people liked Revver. But the post-roll ads were not often viewed.

And remember what is kind to the viewer and advertiser:

Hulu sometimes offers a choice of three ads. You can also choose to watch a movie trailer and watch an entire show without interruption. Or watch 30-seconds spread throughout. That’s good. Obviously we have to consider the ratio of ads to content, and hopefully the first video we watch is sans ad. Maybe prerolls (or mid-rolls) can show up later in one’s session, before longer and more valuable content.