Pre-Roll and The Return of the Covenant: An Editorial

After much discussion about opt-in advertising and the value exchange between content owners and consumers at yesterday’s OMMA Video Conference, I decided to post this piece, written back in April but never published.

During the Passover holiday, conversation at dinner inevitably turned to everyone’s jobs. While the online video market is difficult to explain to an octogenarian, I had the help of two family friends that worked for Viacom. One works for TVLand, and the other was responsible for counting the number of YouTube’s violations of Viacom’s copyrights. In the spirit of the holiday, we compared online video advertising and the distribution of content to the story of Moses, and managed to provide a comfortable level of understanding of the technologies and challenges of the space.

The year was 1 BT. Before Tivo. And in this holy analogy, like in true biblical times, there was a covenant. And this covenant was as important to its time as the one in the bible. “Thou shall watch thy commercials, and content will rain down upon you like manna from Heaven.” Amen.

Also as in biblical times, there are heathens, detractors and blasphemers. Sixty years after the first commercial was aired on television, a new false idol appeared – a new golden calf – and its name was Tivo. Praise Tivo, who empowers us to live commercial free.

In today’s terms, ad-skipping breaks the covenant between the content producer and the content consumer. As “Tivo” morphed into a verb, the distinction between ad-skipping and time-shifting disappeared from the consumer’s vernacular. And with that loss, so went the covenant.

But like a biblical story, there are saviors. And today, online video advertising can be the savior of content and ad revenue. As an industry, though, we must be content missionaries, converting today’s heathens into believers, and show them the way. They have lost faith, but they can be saved. There is salvation for them, and we offer these sinners the control and convenience they seek. Dynamic Logic’s Nick Nyhan introduced a new trinity at OMMA: “Control+Shift+Option.” Consumers want control over their content. Where and when they watch it. And as an industry, that works out quite well for us.

The fact is that consumers’ perspectives are tainted from the Napster era, when they became accustomed to even the most desirable content being free. Online video is facing a similar dilemma, where consumers are asking for too much with little in return, leaving the value exchange out of balance.

Yet we can provide consumers with all of the convenience and control they want and return balance to the value exchange. We will deliver content to those who want it, but they must adhere to the new covenant. You can watch when you want, where you want, on whatever device or screen you want. But you may not have it all for free. Access to premium content still requires a balanced value exchange, be it a $1.99 for a commercial free download from iTunes or watching a few ads in the middle of an episode of Lost. Our responsibility is to evangelize that the Internet provides the most generous value proposition ever offered to them, and that watching a few ads is well worth the price of admission. More importantly, it is also our responsibility to keep that value exchange in balance.

Pre-roll has been demonized as of late, and in my opinion, quite unfairly. Pre-roll and mid-roll have been unfairly criticized as poor formats – a patently untrue label. As with floating and transitional ads, the pre-roll should be bastardized, not as a format, but for the overzealousness and abuse of marketers and publishers who use it when and where it shouldn’t be.

With the introduction of most new ad formats and marketing channels, there is always a rush for advertisers to be the first, to set the trends, to lead the zeitgeist. This often results in advertisers doing something because they could, and not because they should. Pre-roll is no different. Despite the first commandment of online video – Thou Shall Not Reuse Your Television Commercial Online – that was what marketers had available, and thus, what they used, even though we can all agree that a 30-second spot has no business in front of a one minute piece of content.

Fortunately for the pre-roll format, there is a content renaissance happening right now. Like the transition from the Industrial Age to the Digital Age, the Internet is quickly transforming into a medium for consuming vast amounts of video content. We shouldn’t be so hasty to condemn an ad format to eternal damnation before there is enough appropriate content to support it. The broadcast networks are already reaping the benefits of the format across all of their online shows. More publishers will have their day soon enough.

Watching a pre-roll or a few mid-roll ads is a very fair value exchange for a thirty minute sitcom, hour long drama or movie that you missed the first time. As more long-form content comes online, pre-roll and mid-roll advertising will find their proper homes – and they will be infinitely more palatable for users and advertisers alike. There will be more content, and it will be good. And for that, let us all say, “Amen.”