Banner Year for Video

With at least one notable online ad seller giving up on the banner ad entirely, a big question for 2010 is, will a slew of top publishers follow that lead?

ShortTail Media, which was founded in May of 2008 as an ad network alternative for premium publishers looking to protect the value of their ad inventory, has ditched its original business model to focus entirely on online video. After successfully testing a full-page video interstitial ad in the summer of ’09 dubbed the D30, the startup has recently inked contracts with several top publishers to begin offering the D30 regularly. These include NBC Universal’s iVillage, The Huffington Post, Time Inc.’s EW.com, several Rodale sites, Business Insider and the blogging company Six Apart. The New York Times and BusinessWeek.com have also tested the D30; and already, brands such as Best Buy, Ubisoft Siemens, AstraZeneca and Toyota have run campaigns employing it.

ShortTail concluded that brand advertisers are either simply not attracted to display ads or continue to view old-school banners as a direct-response vehicle only.

“In the last 18 months, the market has completely accelerated to performance side,” said ShortTail CEO David Payne, who previously ran CNN.com. “But the big honking problem with that is that display ads get valued .01 percent of the time.”

Payne is referring to the idea that most brand advertisers—even though they preach measuring engagement—continue to evaluate campaigns based on the click. And click-through rates for banners remain low, which makes branding efforts look ineffective.

“To me, the only place branding is happening online is with video,” Payne said. Yet he argues that even as online-video usage numbers soar, most publishers still generate the majority of impressions on text pages. Payne contends that the D30 allows publishers to monetize nonvideo content with more expensive video ads.

Thus, ShortTail’s vision for the D30 is nothing short of grand; the company sees the placement as potentially reinventing the entire online media landscape. “This really is the holy grail,” Payne said.


However, even as ShortTail signs on several key sites, the biggest sites on the Web (the portals and social-networking giants) are conspicuously absent—likely because they aren’t facing the same business model challenges that content producers are. Payne says he doesn’t need the Yahoos and Facebooks of the world to succeed. So far, buyers and sellers are bullish on the D30, though few see it as re-establishing the entire Web-ad market.

EW.com tested the D30 last summer and opted to sign on again this year after promising results. Tom Kirwan, EW.com’s national director of digital sales, said the placement answers a growing demand for high impact ad units, while also providing more consistent video inventory. “The conversation has been, how are we going to use the Web as a branding vehicle?” said Kirwan.

Often, that conversation turns to video. “With video, we have strong volume, but selling pre-rolls can be a challenge. Traffic is often driven by seasonal spikes,” he said.

However, Kirwan is looking at the D30 as a premium unit, not a display replacement. That thinking was echoed by Derek Murphy, senior vp, business development for The Huffington Post. “There is always going to be more text on publishers’ sites than video,” he said. “So there is a need.” However, advertisers also turn to HuffPo to tap into the conversations amongst its user base, something the D30 doesn’t necessarily do. “I think of this as another tool in our arsenal,” said Murphy.

One buyer, who spoke on the condition of anonymity, warned against overuse. “When you buy a certain category, you reach the same audience on several sites,” he said. “This is way too flashy to be running in too many places.” ShortTail’s Payne is aware of such concerns and said he’s working on frequency capping between different sites.

Still, it’s the flashiness that makes the D30 attractive. “This offers the real estate of an interstitial with more dynamic creative,” said the buyer. “It’s the best of both worlds.”