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Companies test waters with online video ads

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New online video formats give marketers a chance to play TV-quality ads over the Internet, combining brand advertising with direct response capabilities.

While the initial appeal seems to be mostly to b-to-c advertisers with big branding campaigns, some b-to-b advertisers are using the ad formats to drive leads and sales in addition to branding.

The new formats include Unicast’s Video Commercial and MSN Video, both of which were announced last month.

The Unicast Video Commercial is currently in beta test with six advertisers, including two—AT&T Corp. and Vonage—that are targeting business customers.

The other four advertisers are McDonald’s Corp., American Honda Motor Co., PepsiCo and Warner Bros. Entertainment.

The Video Commercial is built on the Microsoft Windows Media 9 Series platform and is delivered via Unicast’s precached technology. The commercials are 2 megabyte, 30-second spots that play TV-quality ads when users move between Web pages.

MSN Video spotted

Meanwhile, Microsoft Corp. rolled out MSN Video, part of the latest version of its MSN Internet service. MSN Video plays 15- and 30-second spots on the MSN network of sites.

So far, Microsoft has signed up advertisers Gateway, Discover Card and Revlon Consumer Products Corp.

"The primary audience for these ads are marketers that already have TV spots," said Nate Elliott, associate analyst at Jupiter Research.

"The immediate appeal will be to b-to-c marketers," Elliott added. "The potential for business audiences depends on the targeting."

Vonage, an Internet phone service provider, is targeting small businesses and home office users with the Unicast Video Commercial.

It is currently testing three different commercials developed by ad agency Gardner Nelson & Partners, New York, on the service.

"We wanted to look at opportunities to complement direct response advertising with some branding," said Judy Gern, account director at Carat Interactive, which developed the online campaign for Vonage. "We saw this as a way to make good use of what has already been developed for TV in a format that is really worthy of a TV commercial."

The Unicast Video Commercial ties direct response capabilities to the branding campaign by presenting interactive screens to users after the commercials play.

Vonage is using the screens to direct users to a landing page to get more information about Vonage.

Gern said small-business customers are similar to consumers in their purchase behavior: They are looking for features and attributes of the service, they are price-conscious, and they don’t have multiple layers of decision-making.

Allie Savarino, senior VP of Unicast, said the Video Commercial "is designed for any advertiser that places a premium on a video asset—whether that is a TV commercial or a product demonstration video—and wants to combine that asset with all the benefits of the Internet."

Savarino said the interactive screens that appear at the end of the video commercials allow advertisers to take polls, collect information or redirect users to other information.

The Unicast Video Commercial will be available March 1. Unicast will license the technology to Web sites including ABCNews.com, Accuweather.com, CBSSportsline.com and ESPN.com. The pricing is expected to be about $20 to $25 per thousand impressions, which is about the same price as Unicast’s Superstitial ad format, Savarino said.

The MSN Video service is available now. Pricing is negotiated between sites running the ads and the advertisers or their agencies.

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