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Video has taken center stage at Drilling Down on Local ’07. Actual local video ads are getting a lot of play on the jumbo-tron screens that flank the stage  both between sessions and during some presentations. This has been valuable to put a “face” on the discussion of local video that always seems to happen on a theoretical level. Thanks to Spot Runner, TurnHere and others for contributing clips to the cause.

To further solidify that local video ads are real, a two-person panel of real-life Bay Area small businesses confirmed that they are both in the midst of video production for their privately owned shops (a cosmetic dentistry practice and a roof rack shop). This was a small but telling anecdotal example that local online video advertising is really happening. Peter Horan CEO of Media & Advertising at IAC also confirmed that Citysearch will integrate local video ads from TurnHere into its listings.

Most of the sessions throughout the conference, in fact, involved video in one way or another. The thought is that video can have a lot of resonance with small businesses. If you are plumber, for example, video is more likely to be something that you conceptually “get” and is closer to home. Compare this with online performance-based marketing such as pay-per-click that may be less attractive and more abstract to certain small businesses.

Yellow Book's Gordon Henry echoed this during yesterday's “Heavy Hitter” panel: “Sales reps get it and advertisers get it. It’s something that everyone can relate to,” he said.

There also could be a certain degree of the same vanity factor in video that we’ve seen traditionally drive some Yellow Pages advertising. Interestingly, this could mean that many small businesses not participating in PPC could essentially leapfrog it and land on the next development in online marketing: video (much like some developing countries that leapfrogged a telecom infrastructure in favor of wireless telephony).

Combine all this with the fact that the cost of video production has fallen within the reach of many small businesses with offerings from the likes of TurnHere and Spot Runner. And then you have online video distribution and the possibility for videos to show up alongside IYP listings as an incremental product bundle ( CMO Matt Crowley affirmed this opportunity during a video panel), and this starts to get interesting.

This all makes sense, according to Spot Runner's Nick Grouf because television has traditionally been the “holy grail” for small businesses  always attractive yet cost prohibitive. Nick demonstrated how Spot Runner can drastically undercut ad agencies with new forms of creative and an automated process of customized production and media (cable) buying. The next step will be moving from the neighborhood targeting possible with cable to the IP targeting possible with IPTV and online video to target down to a set-top box level.

Still, all the optimism has to be reined in to some degree by the many challenges in getting there. Overall, the media world continues to fragment, which creates a big challenge in corralling consumers around any local online business. That challenge underscores many of the online opportunities we talk about, as well as emerging media such as mobile and IPTV.

Though a lot is happening in the online video space, adoption issues remain: User adoption, advertiser adoption, and technology and distribution models all exist in a three-way chicken-and-egg scenario of sorts.

This comes down to a challenge in trying to figure out user preferences for where and how they want to watch these ads and to correspondingly build distribution models around them. But the necessary first steps are happening. There is lots of talk and experimentation with these models. We’ll continue to see experimentation and we’ll keep talking.

This Post Has One Comment

  1. Awesome Story Here::: How will publishers and media outlets price video ads?

    Production costs are currently high, and ROI is yet to be quantified. Challenges for implementing a solid rate card pricing approach will be many.

    My guess is that local video outlets will experiment with several pay per models, flat run models and radio spot/cable TV equivalents. In the end, advertisers are looking to link Ads with returns (ROI). We suggest that early adopters at video focus their efforts on video scenarios that support a close linkage with ROI (such as flat panels in 7-11 stores)…. and closely monitor / tweak the model with controlled experiments.

    Later scenarios could include brand awareness returns… but only with a proven, underlying ROI.

    Content owners will also be challenged with finding the right mix of "entertainment" … and ads… (How many Yellow Pages companies have delivered top rated consumer entertainment?)

    Shawn Wiora
    Steeplechase Resources, Inc.
    Dallas, TX


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