Forrester Research has just released a comprehensive study examining online video consumption and the effectiveness of online video advertising.  For those of us trying to figure out how online video advertising will work, this is a very valuable report.

Senior Analyst Brian Haven speaks with Beet.TV from his Cambridge, Massachusetts office. His take on the nascent online video advertising space is both optimistic and harsh.  He writes that video ads seen on clips as "pre-roll" don’t yet resonate with consumers: they don’t notice the ads, don’t interact with them and are fairly negative about ads that interfere with their viewing enjoyment.  He says that 82 percent of consumers say that ads within a video clip are "annoying." 

Context is King

Half of consumers are OK with banner ads alongside the clips.  Brian says it’s essential that the ads have some kind of contextual relationship to the video. He cites companies who are making contextual advertising more attainable — he lists Kanoodle, IndustryBrains and behavior targeting firms like Revenue Science and TACODA.

Advertisers Need to be Content Creators

On the positive side, Brian says that the most successful online advertising to date are ads that are humorous or informational. The report finds that TV-style video advertisements found on content sites are successful.  He also notes that advertiser-created content ads placed on Google Video, YouTube and Yahoo! Video can be productive.

Brand-related Portals Work 

The Nike soccer site Joga.com proves that advertiser-created destinations work.

Calling Madision Avenue

Content providers and advertisers are reversing roles. Madison Avenue must make advertising relevant, crafted to entertain and empower consumers, not annoy them.

The report is not free, but worth the price, we think. 

Brian will be a panelist at Streaming Media West in San Jose later this month.  We’ll be there too!

Andy Plesser 

Newsweek’s Brad Stone weighs-in on YouTube in the new issue — wow, that’s a sh**load of coverage — Forbes, The New York Times now Newsweek.  Like the Times piece Newsweek raises questions about YouTube’s potential copyright issues and its business model. I wonder if all this hype is a good thing?  These dudes might want to stand back just a little bit from the bright light of media exposure.  Whoa.

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