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A new dawn for video advertising?

MirriAd has announced a partnership with VEVO, an online music video channel that accounts for half of YouTube’s traffic. The deal represents the first step in a potential quantum leap for online digital advertising.

Last year Google invested a reported $40–50m into VEVO, a digital music channel which has run its content on YouTube since October 2011. The 7% acquired by Google valued the business, which is a 2009 joint venture between Universal Music and Sony Music Entertainment, at more than $500m. VEVO is now Google’s biggest channel, accounting by some reports for over half of YouTube’s total traffic.

In theory, premium content with such a large audience should bring significant advertising opportunities. Yet since Google acquired YouTube in 2006, it has been criticised by many commentators for failing to fully monetise its asset. Skippable advertisements are skipped. Non-skippable advertisements frustrate viewers and invalidate YouTube’s proposition. Mid-video and overlay advertising are cumbersome. So whilst real-time display advertising continues to reach new heights of sophistication, video promotion is still based on a model which has changed little since the early days of internet advertising.

And that’s why MirriAd’s deal with VEVO is potentially so important.

VEVO will use MirriAd’s technology will to digitally insert advertisers’ products and branding directly into YouTube music videos. This form of advertising cannot be skipped, and is likely to be watched and shared multiple times by each viewer. It also allows brands to build powerful associations with the singers and bands featured in the videos the viewer has chosen to watch.

As it becomes easier and faster to insert products into digital video content in this way, it’s not hard to imagine a world where video brand advertising is customised to the same extent as real-time display ads. Products selected for you based on your online profile, seamlessly inserted into your favourite music videos or TV shows and made clickable to take you to more information or special offers. How much might an advertiser pay for that?

MirriAd’s union with VEVO puts the company right at the centre of a potentially permanent change in digital advertising.