Digital Media Buzz > ‘Ad’ it Up: In-streams and Overlays Enhance Web Video

‘Ad’ it Up: In-streams and Overlays Enhance Web Video

By Lee Simmons

In the fast-growing world of online video advertising, intrusiveness has become a rule of thumb. Gannon Hall should know. As COO of Kyte, a developer of online and mobile video platforms, Hall recognizes what makes a great online video ad.

“The more intrusive an ad is to the user experience, the more valuable that is to the publisher,” Hall says. “Its effectiveness depends on how engaging the content is.”

Kyte is one of many developers trading in the rapidly evolving niche of online video technology. In-streams and overlays in particular are technologies that have become important tools to video designers and online advertisers. YouTube and Hulu videos feature both prominently, and a growing number of corporate websites utilize the technology to engage customers.

An in-stream is content that streams uninterrupted from an embedded video platform on a website or mobile device. For instance, a pre-roll in-stream might be a 15-second advertisement that precedes a video. Similarly, a post-roll in-stream is video content that follows the main video content. In-streams cannot be stopped, paused or altered during playback, making them particularly valuable to users aiming to protect their copyrighted videos.

Another video technology gaining credibility in the online advertising realm is the overlay. Overlays are images or content that are pasted on top of a video. A lower-third overlay is a popular example, whereby an ad sits atop a video on the lower third of the viewing screen.

As advertising dollars continue to move away from traditional media in favor of new digital venues, advertisers have struggled to find the magic bullet that turns online marketing into a profitable pursuit. In-streams and overlays are two of the new technologies making that effort possible.

In terms of value, pre-roll in-streams generate the highest CPM (cost per thousand views) in digital advertising, with overlays coming in a far second, Hall says. A typical pre-roll in-stream might cost around $45 per CPM, the highest price point among the available technologies. However, along with the cost comes value, Hall explains. The fact that in-streams cannot be stopped is a major value proposition to customers. The platform also enables customers to accurately measure exactly how many times an ad has been viewed.

“Pre-roll in-streams are significantly more valuable than display ads,” Hall says. “It offers unique capabilities for engaging and monetizing customers.”

Kyte builds its platform (dubbed the Kyte Player) for customers to stream content online and via mobile devices. The customer is responsible for actually integrating the content with the player, and Hall says many customers find significant cost savings by utilizing existing advertising inventory. For instance, customers often take an existing video advertisement and re-edit it for a pre-roll in-stream.

Besides their marketing potential, in-stream and overlay technologies have also broadened the palettes of video designers. Matt Patterson, an Austin-based writer and film director who shoots for a variety of clients, has used both technologies in vastly different ways. The average person watches one program (or stays on one Web page) for an average of 2 minutes and 43 seconds, Patterson says. The challenge lies in combining technology and content that leverages the shorter attention spans of viewers.

“On the film side of things, because distribution is dying, everybody’s trying to figure out how to leverage the Internet,” Patterson explains. “The Internet is like a buffet. What’s cool is that companies are starting to realize that traditional marketing methods don’t work, and that allows us to be more creative.”

Despite the potential of new video technologies, one major downside has emerged, adds Patterson: the dichotomy between better cameras and smaller video screens. Many video designers use high-definition cameras, yet more video content is viewed on ever-diminishing screens.

“It creates a lot of issues,” Patterson says. “You get artifacting, where things just don’t look as good as they could.”
Patterson is also one of a growing number of designers concerned about the growing array of available technologies.
“There are so many different end products now that it’s complicated,” he adds. “I’d like the developers of the technology to figure out what they’re doing and just move forward.”

Kyte’s Hall agrees that rapid innovation hasn’t necessarily made life easier for designers or marketers. He cites the Interactive Advertising Bureau’s recent efforts to create a standardized format, as well as measurement standards that can be adopted across the industry in general. “The downside to a technologically motivated situation is that there are too many options,” he says.

Despite the inherent challenges, Hall predicts that in-stream and overlay technologies will continue to evolve as online and mobile advertising become standard marketing fare. “There’s a lot of technology, and companies are emerging to optimize the most yield from their ad inventory,” Hall says.