There’s no shortage of phenomenal video content online today. Movies, sitcoms, music videos, sports highlights, cat videos… they’re all just a click away. And yet in Q1 2011 alone, we chose to watch ads nearly 800 million times. Why?

Let’s be clear, we’re not talking about pre-roll or auto-play ads – these ads interrupt us while we’re trying to watch our movies and sports highlights. When we choose to watch ads, we click the “play” button. It’s an active, lean-forward experience with the brand. In fact, choice-based ads don’t have to interrupt sitcoms, music videos, and other content because these ads are the content. As a result, choice-based ads generate user-initiated views, not impressions like pre-roll ads.

Some of the most common examples of choice-based ads are Old Spice’s Old Spice Guy, VW’s The Force, and T-Mobile’s recent Royal Wedding Dance. We click “play” to watch these ads because they look interesting, we like the brand, a friend recommended them to us, [add your reason here]. But beyond these generalities, the most popular choice-based ads have specific characteristics that influence our decision to watch them.

#1. They look and feel like content. It might sound strange, but it doesn’t feel like you’re watching an ad when you choose to watch an ad. This is because when you choose to watch an ad you’re focused on what interests you, not what interests the brand. This means that the ads we choose to watch aren’t standard brand pitches. They’re lightly branded, with few facts, features, and figures. Instead of talking about the product and how great the brand is, these ads focus on storytelling.

#2. They’re engaging. The ads we choose to watch are funny, sexy, informative, and, most of all, entertaining. Frequently, these ads are surprising, unpredictable, and unbelievable, leading us not only to watch them again and again, but to pass them along to our family and friends. Choice-based ads enable – even encourage – us to get involved and engage directly with the brand – to respond with comments, upload a reaction video, play with the ad in unexpected ways, blast the ad across Facebook and Twitter, and more.

#3. They’re (relatively) brief. Choice-based video enables advertisers to tell their story anyway they want. There are no restrictions on time or content like in TV or pre-roll advertising. And while this gives advertisers some room to run, the ads that ultimately flourish in online video are relatively brief, usually no longer than 2:00 minutes. This means that for us, the viewers, the ads are long enough to develop an interesting story, but not long enough to lose our attention. Case in point, Visible Measures published research last year that says 20% of people abandon a video clip in its first 10 seconds. Nearly 45% abandon by 60 seconds.

#4. They’re viewable. In the time it took you to read this article, around two days’ worth of video has been uploaded to YouTube, including ads we’ll choose to watch. But because of the sheer wealth of video content that’s available, there are plenty of great ads that don’t get the recognition they deserve – they simply get lost in the noise. So, in addition to choosing to watch ads because of great content, the ads we choose to watch also have great media strategies behind them. These media strategies focus on generating choice-based views – not impressions – and are frequently charged on a performance basis, like cost-per-view (CPV) instead of the traditional CPM.

Many of the most-watched choice-based campaigns of all time have adopted these exact strategies. They create great content and promote it with choice-based paid media. As for the results, think about them the next time you choose to watch an ad.

We can barely escape the words “social” and “viral” today. You’ve probably had meetings about one or both of these words in the past month. And for good reason. Everyone wants to know how to do social and everyone wants to know how to get their campaign to go viral. Social and viral are good and powerful ideas. But as good as they are, we’d like to add another idea to the mix: Choice.

The reason is that if you don’t have choice, social and viral can’t happen. Social capitalizes on how consumers choose to interact with their friends and family. Viral is simply consumer choice on steroids.
Choice is what puts consumers in control. It’s what lets consumers be consumers.

But as fundamental as choice is in our day-to-day lives, this is the first time in history that consumers can choose which ads they watch. For thousands of years, consumers have been forced to see specific advertisements. And they’ve come in the form of borrowed engagement.

A History of Borrowed Engagement

Borrowed engagement is one of the cornerstones of advertising. It’s based on the simple idea of getting your product and messaging in front of consumers. Think of the last time you watched American Idol – before they voted off your favorite contender, you had to watch an ad.

The Egyptians were among the first advertisers to use the borrowed engagement model. They produced wall posters made of papyrus to push sales messaging. The Romans took the borrowed engagement model a step further and chiseled messaging for local brothels into their streets. This was the standard for hundreds of years – with literacy growing slowly, ads were heavily based on familiar images that were strategically placed throughout towns and villages.

It wasn’t until the 17th century, when we saw the first print ads, that advertising made a huge leap forward. Print ads brought borrowed engagement home.

After print, ads jumped to radio in 1920. Television ads came soon after, with the first TV ad borrowing viewers’ engagement before a Brooklyn Dodgers and Philadelphia Phillies game on July 1, 1941.

Fast forward a few decades to the digital era and we find a multitude of new ad formats. For online video, one of the most prominent is the pre-roll ad format. Like ad formats before it, going all the way back to the Egyptians, pre-roll advertisements borrow engagement from consumers to broadcast brand messaging. The difference is that instead of borrowing engagement with papyrus wall posters, pre-roll ads borrow engagement before 30 Rock, Lady Gaga, and crazy cat videos.

The Problem with Borrowed Engagement

Pre-roll ads and other borrowed engagement formats can work for advertisers, but they don’t take advantage of the full potential of online video advertising. Despite the innovative sharing technology built into pre-roll and other borrowed engagement formats, these formats are inherently anti-social. And if ads aren’t social, they won’t be going viral.

The social problem for pre-roll isn’t about the technology. There are many fine companies producing amazing ways of experiencing and sharing pre-roll ads. The problem is with the borrowed engagement model itself. The model is based on interrupting consumers and forcing them to watch an ad. It was the best model we had for TV, radio, and older platforms, but now, in a world where consumers can make your brand the center of the dialogue, the model breaks down. When was the last time you took time away from watching 30 Rock to share an ad?

Why Choice is the Future

Choice changes the social dynamics between ads and consumers. When consumers can choose to watch ads, as opposed to being interrupted by them, they share and recommend those ads to friends and family, blast them across social media sites like Facebook and Twitter, embed them on their blog and site, copy and repost them across hundreds of video-sharing sites, and more. This is Earned Media, and it’s the crown jewel of advertising.
The years ahead will see incredible innovation in video advertising. Some of it will be focused on optimizing existing technology based on borrowed engagement, from which we’ll likely see significant improvement. But the real push will be to create new ad formats that enable advertisers to be the center of the dialogue, create organic relationships with their consumers, and systematically drive Earned Media. And all this comes from choice.

Our lives revolve around choice. You chose what to wear today. You chose what to eat for breakfast. You chose how to go to work. You chose to visit this site and read this article.

Choice permeates all of our decisions, from the mundane — like choosing to order the pasta bolognese — to the extraordinary — like choosing whom to marry.

Choice is Better
Obviously, being able to make a choice is better than being forced to do something. In a research study conducted by choice expert and Columbia professor Sheena Iyengar, American children who chose which color marker to use and which anagram to complete performed 250 percent better than the children who were told what to do. In another study conducted by Iyengar, people who chose which yogurt to taste ate more and valued the yogurt one dollar higher than those who were told which flavor to eat. Iyengar’s research also shows that employees who believe they have more choice score higher on metrics of motivation, satisfaction, and performance.

But if this is the case, and choice is better than forced, why haven’t advertisers tapped into consumer choice? Why not let consumers be consumers and let them choose?

A history of Borrowed Engagement and Broadcast
Advertising has worked on the principles of borrowed engagement and broadcast for millennia. It goes back to the Egyptians, who would broadcast messaging through wall posters. The Romans used town criers to belt out ads for local merchants after announcing news from the front lines. The first print ads, broadcasting messaging in weekly magazines for books and medicine, came out of Europe in the 17th century.

And so it’s been throughout the history of advertising — advertisers have been borrowing our engagement and attention from what seems like every imaginable source to broadcast their messaging. But you can’t blame them for this approach. Until a few years ago, their options were limited. For example, in television, the broadcast model works. We watch American Idol. Advertisers borrow our engagement from the show to tell us about their products. It makes sense.

Advertisers have adopted the broadcast approach for online video as well. It comes in the form of pre-roll, mid-roll, and post-roll advertising. These ads borrow our engagement before and during our favorite shows, movies, and cat videos. They’ve doubled across premium sites like FOX and NBC in the past year.

The Problem with the Broadcast Model in Online Video
The problem with the broadcast model in online video is that, unlike other media, choice is available to consumers in online video. As we saw with the Egyptians, Romans, and American Idol, the broadcast model works in specific contexts, namely where choice isn’t an option. But in online video, specifically social video, consumers can choose the ads they watch. Chief strategy and innovation officer of VivaKi, Rishad Tobaccowala, calls this availability of choice and the empowerment of consumers “the people’s network.”

Social video Advertising: The Place for Consumer Choice
Audiences can choose to watch branded content across sites like YouTube, Metacafe, DailyMotion, Yahoo, MySpace, and hundreds of others. They can visit these sites across a number of devices, from their computer, to their smartphone, tablet, and set-top box. When audiences choose to watch content related to brands, they can copy, mix, mash, and repost these ads across the web. They can share them with their friends and family, and blast them across Facebook and Twitter. They can embed ads into their blogs and personal websites. They can comment and rate the ads as well. For the first time, a type of advertising has conversation and sharing built in.

This social activity — sharing with friends and family, embedding on personal blogs and social media, etc. — creates earned media, or endorsed brand reach.

The combination of video ads and social activity has come to be known as social video advertising. Social video advertising is one of the fastest growing advertising segments today, if not the fastest: It grew more than 900 percent more than search and display advertising in 2010, and more than 2,000 percent more than television for Super Bowl 2011.

This rapid growth has created intense competition among social video advertisers. The Ad Age Viral Video Chart, powered by Visible Measures, features the most-viewed — user-initiated (i.e., chosen) — ads of the week. Since the chart’s premier in March 2009, the threshold to make 10th place has increased more than 400 percent. Thresholds for the Variety Top 10 Online Film Trailers Choice, also powered by Visible Measures, have increased more than 110 percent since its inception.

The Revolution of Choice is Now
Ironically, the emergence and rapid growth of social video advertising gives advertisers a choice. Do they continue with the broadcast model and continue pouring money into pre-roll and other forced formats? Or, do they shift gears and try to capture audience choice in social video advertising?

Response from the industry seems to indicate that a shift is already underway. Just last month, TED announced the winners of its Ads Worth Spreading contest, a contest “seeking to reverse the trend of online ads being aggressively forced on users.” In December, YouTube announced an ad format called TrueView Video Ads, which “gives viewers choice and control over which advertiser’s message they want to see and when.” Last year, VivaKi launched The Pool, which has sponsored an ad format that gives audiences the choice of which ad they want to watch before video content. And cost-per-view pricing has been submitted to the IAB for consideration as a standard option for pricing video advertising.

You can also do your own research: Google “how to make a viral video” to see how pervasive the idea of virality is today. What these seemingly endless articles and blog posts are talking about is how to capture audience choice for video. Or check out the Viral Ad Chart each week just to see how ubiquitous and innovative viral campaigns are becoming. In the end, “viral” is simply a manifestation of consumer choice.

When Audiences Choose, Advertisers Win
Beyond professor Iyengar’s studies, industry research on choice-based ads has begun to emerge. Research from The Pool indicates that when audiences choose which ad they watch — as opposed to being forced to watch a pre-roll advertisement — brands lift metrics increase between 300 percent and 450 percent. Enabling consumers to choose advertising also allows them to choose a brand early on in the marketing funnel, which can help them become more accustomed to choosing a specific brand overall, a critical behavior when shopping at the grocery store, mall, Amazon, etc.

A Renaissance in Advertising
Advertisers are gradually catching on to the idea of choice. They’re beginning to understand that when audiences choose which ads they watch, the ads need to be good to be chosen. This has created a quality war across the advertising industry. The result is a renaissance in advertising.

Not that there haven’t been great ads before — there were plenty of great ads last century. The difference now is that, with social video advertising, we choose the ads we watch.