I interview Ari Paparo, Group Product Manager of Advertising Product for Google, about his forecast shared at the Chicago Interactive Marketing Association’s 7th Semiannual Interactive Marketing Survey, that in-stream video advertising will be “huge” in 2010, thanks to growing adoption by media sales agencies of Internet Advertising Bureau’s (IAB’s) development of video ad standards. Will this open up video ad serving to more businesses on the smaller scale?

For some background, The IAB has already published a number of reports for its proposed standards, guidelines, and best practices for digital (online) video advertising. These include everything from the ad serving technologies, metrics definitions and measurement guidelines, creatives, and length variables (short-form vs. long-form).

Share with us how in-stream video advertising is going to be huge in 2010 on every platform – mobile, desktop, etc… – compared to where it is today.
(Sorry in advance for the audio/video quality below as all I had with me was a Flip and it was dark and loud at the show)

Ari Paparo: Over the past several years, virtually every publisher started off running in-stream video advertising opportunities, and every agency has been buying them. But the friction involved in actually executing has been enormous, to the point where agencies have to send out videotapes or files for everything they’re working on, their metrics don’t make sense – it’s just a pretty awful situation; and, it’s grown despite that.

What’s happened in 2009 is that the industry has come together under the leadership of the Internet Advertising Bureau (IAB), and developed standards for the technical inter-operations for all of the video players. It’s kind of a boring subject, but it’s really important. It’s going to allow for liquidity, where agencies can now buy the way they want to buy. For publishers, they can now share inventory, syndicate, use ad networks to fill their back inventory – all these logjams in the video market are going to go away next year, because of a lot of great work that’s been done this year. It’s been a hidden story; people aren’t talking about it, but I personally think it’s going to make a huge difference. I’ve been talking to most of the major buyers and sellers, and they’re all incredibly enthusiastic about this kind of breaking of the logjam with (video) technology.

The IAB guidelines for digital video advertising (set by the IAB Digital Video Committee) were published back in 2008. You mention that the video marketplace has “come together” under these guidelines in 2009. What needs to be achieved for adoption to be “huge,” since its not there right now? Is it technology implementation, agency/client awareness and consensus, or something else?

There is a natural lag time between the publication of a standard and it’s wide adoption. For the Video Ad Serving Template (“VAST”), in particular, there is a good deal of technical work required by publishers and technology vendors to be able to support a standardized form of ad serving. This work is underway by most of the largest companies in the video space and I expect most companies will be VAST compliant in early 2010.

You appear to be suggesting that IAB’s guidelines for video players themselves are a big reason for what you see as widespread industry adoption. Why is that?

Video advertising is more complex that web-based banner advertising for a number of reasons. Video ads exist within a scriptable player, so the integration is technical to start. Then there are many specific considerations for video, such as: the position of the ad within the playback, how to limit the number of ads based on user behavior, and how to sync ads within and outside of the player.

Is this a subject that mostly affects media sales companies that work on a larger scale of media buys and ad inventories? Or will this provide any opportunities for small-to-medium businesses (SMBs) to enter the digital video advertising space come 2010? Could we be seeing pre-rolls, post-rolls, and other types of in-stream video advertising from SMBs, or is that still aways off?

Right now the in-stream video advertising market is very inefficient and thus the only companies that can make it worthwhile to participate are the very largest advertisers and video publishers. With the increasing inter-operability we expect the barriers to participation to decline, which should open opportunities to smaller marketers.