Three weeks ago I was speaking at a technical/CMS conference down in Austin, and the response of the attendees to several of my initial questions highlighted yet again the challenge facing local media (especially TV).

Keep in mind that the audience was composed of men and women who all work in the Web industry (digital agencies, technology companies, even folks that run university websites), so obviously some of the answers are skewed heavily in favor of the Web over other media.  Still, though, these are generally successful people who would make up a valuable part of any advertiser’s demographic.

As I asked:
“How many of you are on LinkedIn at least once a week?” – 100% of the 60 or so attendees’ hands went up.
“How many on Facebook?” – 90% of the hands went up.
“How many on Twitter?” – 60% of the hands went up.
“MySpace?” – 40%

“How many of you read a hardcopy newspaper at least several times a week?” – roughly 20% of the hands went up (including my own, I am a devoted Wall Street Journal subscriber and am very attached to using downtime “during taxi, takeoff, and landing” to read through the Journal.)

Then, the kicker:
“How many of you watch a local TV newscast at least once a week?” – perhaps 15% of the hands went up.

Interestingly, roughly the same number of people put their hands up when I asked how many of them visited a local media website on a regular basis – a positive note which still doesn’t make up for the decline in core audience.

These types of quick surveys always emphasize for me how much traditional local media outlets are still letting Yahoo!, Google, Weather.com, Craigslist, and the various social media players dominate what will be the main growth engine for advertisers in the coming years.

As part of the industry representing local interactive, I hope that owners of these sites will soon realize that generating 5 million (mm), 10 mm, or even 40 mm pageviews a month in most local markets still means less than a 5% share of the overall online market for user engagement (and only a small fraction of most local sites are generating even 10 mm pageviews a month currently).  Hopefully, this will lead to a level of (smart) investment that is commensurate with the revenue numbers that Wall Street desires.

• Such online video spots are directly analogous to a 30-second TV spot, so media and broadcast ad executives understand the branding benefits involved.
• They are fairly easy to sell on a CPM (cost per thousand impressions) basis, given that it’s easy to show the branding value of an active user click followed by a short commercial view.
• The pre-roll format is appealing to old-word Madison Avenue ad agencies and rep firms because they require creative effort to come up with a good spot for the client, and an advertiser has to be careful on which site this pre-roll spot runs (hence, the advertisers needs both the agency and the rep firm as middlemen to do this leg work).  This keeps people in something close to their current jobs.
• Online video commercials generally don’t interfere with the actual video by covering up any portion of the requested stream.

• Pre-rolls (any form of short video commercial) requires creative work, making the ads inherently more difficult to place for small businesses with small ad budgets
• Online video commercials are inherently disruptive, especially when compared to contextual text ads, as they normally cannot be skipped and take the user away from what they’d really like to do or see online. 
• Most video publishers I speak with estimate that their video impressions drop by nearly 50% when the run 30-second pre-rolls, although some studies cited by the OMMA or OPA would disagree with this.
• The measurement of effectiveness for a video commercial is much harder to define than is a click-through on a display ad – the question remains, “Should pre-rolls be viewed as a branding opportunity or a direct response measurement?”
• One of the most appealing aspects to AdSense and online advertising in general is the ability to engage in CPC (cost per click) advertising and to quickly experiment with various campaigns in matter of days.
• Ad-serving companies such as DoubleClick, Atlast, and 24/7 RealMedia have only recently (ie, in the last 6 months) come up with an integrated way for a publisher to easily traffic both display and pre-roll ads from one integrated console.

• The ads are generally not as intrusive in nature, as they allow a user to immediately begin viewing the video content requested and can be closed by the viewer.
• The ads require minimal creative effort on the part of the advertisers, and campaigns can be varied much more quickly and easily because of this.
• Such ads can realistically be sold on a CPC basis as necessary, as the action desired by the user is truly a click rather than simply a tracked impression.  This leads to less risk on the part of the advertisers.
• Text and graphical ads are less expensive to store, serve, and manage than are video assets.
• Given the large amount of advertisers already participating in contextual ad programs, it’s easy to use textual or graphical overlay ads as remnant backfill.  This means that a site publisher is protected against any bandwidth overage charges from a video that may go viral from their site.

• Such ads may appear and cover up critical areas of the video (such as a station logo or weather ticker).
• Some users may not realize that they can minimize the ad, and be forced to watch a ‘covered up’ version of the content.  This will most likely lead to the user going to another site for the same or similar content.
• Selling overlay ads via CPC rates may never fundamentally value the branding awareness given by being associated with a piece of desired video content.

• Those that prefer an overlay ad to a 30-second pre-roll: 95%
• Those that prefer an overlay ad to a 15-seond pre-roll: 80%
• Those that prefer an overlay ad to a 5-second pre-roll: 50%