The Shulman for Congress campaign (yes, there is life outside of national politics, too) has shown that online video isn’t just for the likes of Obama, McCain, Clinton and Paris Hilton. Lesser known politicians with tech savvy staffers have shown their willingness to dabble in the medium as well.

Dennis Shulman, the Democratic candidate in the 5th Congressional District of New Jersey, launched a parody of NBC’s “The Office” to highlight the ties between the oil industry and current Congressman, Scott Garrett.

In addition to the video, the campaign has also launched a website, “Oilmen for Garrett” to support the video.

The true test will be whether or not the video is effective at all. While the 5th district is made up of the northern most edge of New Jersey, and nearly 650,000 residents, the two-week old video only has about 5,500 views.

Seth Godin wrote an interesting post today that sparked some debate within a networking group that I belong to.

Since I honor the “what is said on the list stays on the list,” I can’t bring you the whole discussion. Suffice it to say the debate was about whether or not what Seth was encouraging was click fraud or not. Just for fun on a Friday afternoon, I decided to take the contrary point of view, and I’m going to share it with you here. Its worth some consideration.

I’ll bite on the controversial point of view.

I’m a bit amazed that he didn’t get into more specifics, since CPM based advertising provides the content producers with some revenue whether the user clicks or not. Maybe the “tip jar” analogy doesn’t work for everyone, but people should thank the advertisers for bringing us all this great, free content. All we’re really asking for is the user to give our clients a little consideration when they are making their next purchasing decisions.

As a staunch defender of pre-roll, I often find myself explaining a contrary point of view. As (I hope) most of you saw, there were three independent pieces that came out in support of pre-roll this week. Tremor (self interest disclosed right here), Break/Panache, and Nate Elliott’s report for Jupiter. We all understand that there is a value exchange that has to take place in order for our business to survive. Sure we want to squeeze every last bit of performance out of our advertising and marketing efforts, but at the end of the day, someone or something has to pay to produce that content. We work in an ad-supported industry. So don’t the ads actually have to support the industry somehow?

When I see a pre-roll (reasonably targeted, appropriate length for the content, but not the point of this discussion) that “presents” or “sponsors” or otherwise enables me to get the content that I want for free, I say “Thank you” in my head, because the alternative is paying for it. Do most of us buy the NY Times at the newstand or read it for free online? Thought so.

Seth didn’t get into enough detail to make a strong case for “saying thanks” vs click fraud, and thats a shame. While display and text ads are much easier to avoid, tune out, or not engage with than video ads are, without clicking, we’d all need to go back to a straight CPM based pricing model to ensure that revenue moves into the hands of content producers. If content providers and producers dont get paid, then what we have is a hobby and not a business.

Performance based pricing models put the pressure on all of us to make our advertising really work, and that is certainly a good thing. But doing whatever it takes to ensure that people can continue to bring us the content that we want for the price we want to pay (read: nothing), then the tip-jar-click shouldn’t really be considered fraud. Advertisers don’t have to pay, and content producers don’t get paid, when we see an ad and it registers and reminds us to buy something in the store over the weekend. Maybe Dynamic Logic can introduce a “pay per brand consideration” pricing model. Again, I’m just taking the other POV for fun this afternoon. Don’t hate me because I pre-roll.

Just to keep the conversation lively, is the idea so different than Radiohead’s “pay whatever you want” to download their last album? The people that liked what they got said thanks by paying for it. Comscore reported that 38% of the people who downloaded the album paid for it at an average of about $8.

I’m well aware that we’re talking aout paying directly for the content vs. forcing an advertiser to pony up for someone elses product, but is it really “click fraud” or just the natural course of events of the business model we operate in? Maybe Seth - or all of us, for that matter - should just slap a PayPal button on every article and allow the money to flow straight to the publishers. Whatever happened to that micropayment concept anyway?

I needed a new subject line to switch gears, rather than segue into the good news with a bad title.

Today, some of the leaders in the video advertising industry stood up for themselves in a very rare - and unplanned - synchronized release of data in support of the pre-roll format. Tremor Media (my employer) announced that they were observing 80% pre-roll completion rates. Some of those “other guys” - Break and Panache - announced some very high completion rate data for their pre-roll campaigns as well.

Now of course I’m biased, and think that our data is more accurate since it was based off a much larger sample size, and also don’t believe CTR is the appropriate measure of success for any pre-roll campaign, even with a call to action. Users want to see content, not click away to “not” watch the content they opted in to watch. But I digress.

Lets also not forget that Jupiter’s Nate Elliott also issued a report, highlighted in today’s AdAge, that shows an increased acceptance of pre-roll. Nate noted that the abandonment rate is much more similar to channel surfing on TV than an issue with the advertising, per se.

Overall, its been a competitive few weeks in the online video advertising world, and Q4 is only going to get hotter.

The gift that keeps on giving. In reponse to John McCain’s ad, comparing Barack Obama’s celebrity status to the celebutards, Paris Hilton shot back with this video on FunnyOrDie.

And continuing to show how 1.0 the McCain camp is, despite using Blip.TV’s player, they have chosen not to allow you to embed their campaign commercials directly from their site. I had to head over to Blip.TV to find it. I’d love to know why, other than to prevent people like us from posting and trashing their commericals.

John McCain’s “Celebrity” ad, though, is currently sitting at #2 on the Viral Video Chart.

Have you been to the movies lately? Jeeeeeeeeez. Ridiculous.

As I was sitting there for the 20 minutes of commercials and previews before the movie started, I found myself getting worked up a bit. Why? Because of all of the bitching and moaning that I was hearing from the people around me. By the time the 8th commercial played - all before the previews - there was a healthy (or not so healthy) mix of people laughing and people who were really, really pissed off.

As I mentioned ahead of the weekend, I was going to see The Dark Night. Over hyped. Too long. Overall, though, not too bad.

But as I was sitting there, watching ad after ad play, I starting thinking about online advertising, targeting, free content, and the great value exchange that we’re offered online.

The ads kicked off with a Fandango ad, which makes sense. Buy your tickets online. I’m OK with that one. Then came the Wal-Mart ad featuring their Hannah Montana line of clothes. Now, my niece loves her Hannah Montana t-shirts, but you wont find her watching the darkest Batman movie yet. (Yes, I know their parents are.) Then came a really long Jeep SUV ad (I think it was for Jeep, but I started texting, so I’m not 100% sure). I’m in NYC. I take the subway. Nice targeting. Then the ad for Bertoli pasta sauce. Oy.

Then came a long Coke drive thru ad, which makes sense because I could actually buy a Coke at the concession stand. Then a long Vitamin Water ad, and then finally an ad for AT&T with Martin Scorsese, which again, was appropriate for the movies.

But eight ads? Way too many. WAAAAAY too many. Why is this even acceptable? Why do I need to defend an ad online ad model that offers free content and candy that costs $1.50 and not $4.50?

My point? If you are going to shell out $11 per movie ticket, should you have to sit through 10 minutes of advertising? I was suddenly reminded - very directly - about just how sweet a deal we’ve got right now with online video.

How many ads are in front of my streamed movies from Netflix? One. For Netflix. And its really a placeholder while the content buffers. How many ads during an online hour of Lost? Three. How many on TV? At least 4 ads per break.

I’m not rushing back to the movie theater any time soon, thats for sure. I’m off the movie release schedule and on the DVD release schedule, and not looking back.

CBS has launched their new HD Video portal with plenty of CBS content to enjoy. A quick view of a few shows on the laptop confirms that the content looks clear, sharp and doesn’t stutter. Looking forward to checking it out on the big screen as usual.

But, wait. What about the ads? I’m glad you asked. Either CBS doesn’t have an HD version of the ads they are using, or are streaming in the ads from a different platform. The ad I saw was so fuzzy that I could barely read the text in it. A second version of the ad was also undeniably low-def.

So what gives? From my perch, I know for a fact that there is demand for online HD content for advertisers to run their HD ads in. Could be some A-B testing going on, but all the ads I’ve seen so far are fuzzy.

Solid ad strategy as well. The first pre-roll is only :15 seconds. Once you are into the content, the ads become :30s. Smart. Why? You’ve already got them hooked, and there’s still fewer ads than on TV. Solid value prop.

Ben Adds: The player offers two quality settings - 720P HD and 480i which CBS terms HQ (High Quality). It looks like the ads are in 480i resolution which would explain the distortion. Intel has signed on as a sponsor so what you’ll see is an Intel ad delivered by CBSi.

On a user-experience note, I just became a fan of Flashpoint, it was the first thing I watched and I was compelled enough that I watched the full episode and the next one because of the quality of the video and the content. CBS hasn’t offered much info about how the video is delivered but you can’t argue with the way it looks.

Moderator: Steve Smith
Philip Braden, ScanScout
Eric Hadley, CEO, Heavy
Rebecca Paoletti, Yahoo
Chris Allen, Starcom

Panel starts with some show-and-tell.

ScanScout Philip Braden shows overlays. Plays in-stream while the video is playing. From that point on, the ad experience is completely user initiated. New example that Philip showed was a video-in-video overlay. Cool demo alert: There was video playing in the overlay. Lots of potential here.

Eric Hadley, CMO, Heavy.com, shows an example from the Husky Media Network. It is a full page takeover that wraps around the video player. They also have a video guide that can load other syndicated content, and then serve an ad against the syndicated content, which has been pre-vetted for ad friendliness. Essentially, their ad covers up all of the content on a website except the video player. It removes the risk of having your ad seen along side questionable content.

Rebecca starts by asking the room how many people would buy those Heavy skins. Not one hand. Then into the Yahoo pitch. Four different formats, but 90% of their revenue comes from only two of those formats. User is prompted to roll over for more info. When the user does, an overlay appears that can be interacted with. Rebecca says they are seeing 6% CTR on them. A whole 6%. Not a “point-six percent.” She also shows a persistent bug that sits on top of the player that will launch an overlay. Clicking on the subsequent overlay can launch a microsite that sits on top of the player. For each clip, the advertiser gets three opportunities to engage.

Steve: What types of content are these formats good for monetizing? How do they map and match against different types of content?

ScanScout: overlays work across all types of content. They also work great for short form content where you can’t show a pre-roll. You can also contextually target the ads. We have a fair number of publishers that have UGC, and we can filter out undesirable content. The technology is flexible, which allows a brand like Disney to have different standards than Budweiser.

Eric, Heavy: We find that the skins are excellent for monetizing longer form content. We can show multiple ads without asking the user to interrupt their experience. The video guide allows the advertiser to know what content their ads will be next to.

Rebecca: We can serve pre-roll against a lot of our professionally produced content, like sports highlights. Some publishers don’t like overlays because their content is their ‘bread and butter’ and they don’t want it covered.

Philip: We can also put the overlay under the player for publishers who don’t want to cover any of their content.

Steve: Are we effectively monetizing short news clips?
Rebecca: Specific content may not be monetized on purpose. Breaking news, for example. We want users to be able to get a hurricane update immediately, without watching an ad.

Steve: Are these formats making video safer for brands?
Chris: We have two buckets. UGC and not UGC. Most of our advertisers believe they can reach their audience without dipping into the UGC pool. But we still see tons of pre-roll, mainly because its easy. They’ve already created it. We advocate for shorter ads. But you can’t get substantial reach without looking to the portals. We also look at the ad-to-content ratio for a publisher. 4:1 content to ad ratio is probably OK. We’re helping our advertisers understand what they can do with video. Most of them don’t know that you can do lead gen with video.

Steve: What about portability? Is there pushback from publishers or brands that don’t want their ads to follow the content as it is hypersyndicated?
Philip: We integrate our technology so that the ads can travel with the video. But we also want to know where the content has gone before we serve an ad.

Rebecca: Portability was a huge push for our latest ad formats. We wanted to make it easy for our publishers to use. We focused on keeping the interactions within the video player.

Chris: We want see where the content goes before we buy ads. Syndicating content out to social networks is still scary for a lot of advertisers. When we first started talking about syndication of content across the web, we knew it would be huge. Previously we had always applied the value to the content. But we’re finding that there is also a lot of value on the publisher that delivers the content. The CBS Audience Network still gets the majority of their views from CBS.com.

Steve: How well do the formats encourage video use?
Eric: We wanted to be able to monetize the video anywhere, and not force people to watch a pre-roll. When you serve an ad in the middle of a video, you’ve already got the user hooked. You need to get them hooked first. If they back out of the video because of a pre-roll, you lose all the potential ad impressions that would have come after it.

Philip: Its hard to say that any form of advertising encourages viewing. But ads need to be configured in a way so that it doesn’t alienate users.

Rebecca: This is an ongoing debate. I always have people saying “kill the pre-roll.” And we’ll test it, but it never affects the levels of video consumption. Our focus is on the number of videos to ads. On the entertainment side, there is no difference in video consumption regardless of the ad format.

Steve: Video ads are becoming more interactive. It is still interruptive, even if it is up to them. Are people really willing to interact with an ad?

Philip: Engagement in general is good. We are 1%+ CTR on the overlays. But more than half of the people that click on the overlay eventually click through to the destination site.

Erik: We put the interactivity in the skin because it is such a large piece of real estate. Our audience multitasks. They want to watch a bunch of goofy videos, not really paying attention.

Steve: Are we getting to the point where there is confusion in the market about what constitutes a video ad?

Erik: You need to try lots of things.

Chris: People expect new things. They want to be entertained and have fresh new things in front of them while they are surfing the web. Part of our job is to be respectful of the user experience.

Steve: What are you charging media buyers for these ad formats?
Philip: Overlays start at $10 CPM.
Erik: We’re looking at $25 CPMs
Rebecca: We’re in the middle of negotiating our upfronts, but generally CPMs start at $25 for ROS because we are able to do a lot of targeting.

Chris: When I compare video CPMs to TV, there is a huge premium online. And we’re willing to pay that premium if we know that it is being effective. I think the “teens” is a good rate for pre-roll.

Head on over to Kevin Nalt’s Will Video For Food and read his post on video sponsorships, product placement and selling out. Its spot on.

In it, he cites 5 trends for online video product placement. I particularly liked #4:

4. There will be no trend four. Trend four is often wrong, which itself is a growing trend.

So go read the other trends, and the rest of the post.

Hysterical video from Bikini Zone.

Uncensored Bootlegged Japanese Bikini Commercial - Watch more free videos

Let us know what you think!

As most of you know, ClickZ’s Kate Kaye provides some of the most insightful analysis of the online ad market. Like me, she’s also a political junkie.

Now that the primary season is over, Kate explains to the Business News Network how the campaigns leveraged new media, and who succeeded, and why.

Ed sidenote: Are non-embeddable players even acceptable any more? Why I can’t share this clip with you right here is beyond me.