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Brands Will Choose Online Video Over Display Ads in 2012: Adap.tv

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Adap.tv completed a research report on the digital video industry shortly before the recent Streaming Media West conference in Los Angeles, and company co-founder and vice president of product Teg Grenager sat down at a red carpet interview to share some of its findings.

This is a good time to be in the online video advertising space, as nearly all the advertisers surveyed said they were sure they would increase their online video spending this year. In previous years, advertisers were more hesitant to jump in.

"This year there were some very interesting findings. The industry is changing and maturing a little bit," said Grenager, noting that the market was due for significant growth.

That extra spending has to come from somewhere, and the loser in advertising budgets looks to be display advertising.

"Digital video actually is, in some ways, a replacement for some of what display was trying to achieve. It's trying to achieve branding on the Web, and digital video's just much better at that," Grenager noted.

Advertisers' goals are also changing this year. In previous years, they looked to online video ads to build awareness. Now they want brand engagement with their ads. Noting that engagement is more a tactic than a goal, Grenager explained that viewers who engage with an ad in some way are more likely to think about that brand and see it favorably.

Creating engaging video ads can be an expensive proposition, requiring a skilled team experienced in building customized experiences. For tighter budgets, Grenager told how Innovid's iRoll system let brands create interactive ads from existing video content.

Audience targeting remains a hot area for online video advertisers, although Grenager is cautious on the topic. While advertisers want demographic targeting to improve ROI (return on investment), slicing up the online audience often results in too small a pool for major campaigns.

"There are very few companies that have cookie-level data about users which defines audience precisely and has high coverage," said Grenager.

The solution, he said, may be to do what television already does: create content targeted to specific demographics (as today's basic cable channels do), in order to lure a large, desirable audience.

For more on online video advertising, including how the VPAID standard can improve the types of customized experiences advertisers can offer, watch the full interview below.

These Streaming Media Red Carpet Interviews are sponsored by Front Porch Digital.

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