Yahoo! Takes A Hard Look At Rich Media Advertising October 18

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The world of online video has been growing at an enormous rate over the past year and many online companies have been trying to get in on what is the next big thing.

One of the major attractions for companies to video sites is simply the sheer number of people now using them. Websites such as YouTube and MySpace have seen a massive uptake in popularity and it is therefore little surprise that the industry is seeing considerable consolidation, with search engine rivals Google and Yahoo! among those moving into the arena.

YouTube’s UK audience has rocketed by an amazing 606 per cent in the past 12 months alone and when Google recently acquired the site it was suggested that the company did so as a pre-emptive strike to stop Yahoo! getting its hands on it.

However, Yahoo! has now hit back and made what many see as a crucial move in snapping up AdInterax, a Rich Media company which specialises in video advertising. The move is designed to give Yahoo! a fighting chance in the Rich Media - notably video advertising - market and allow it to become competitive with Google’s Video Ads.

AdInterax will help Yahoo! to compete with Google’s Video Ads by allowing it to “use sight, sound and motion to deliver a message”, according to the company, which suggests that it sees the new acquisition as a tool for delivering ads direct to consumers, giving a personal touch to advertising campaigns.

An important question which now faces Yahoo!, however, is how to decide what business model it uses to promote its new facility. Does it follow the convention of using a Cost Per Click approach, which has served companies such as Google well, or does it look to impose a different model? By purchasing a rich media outfit in AdInterax, it seems possible that it might adopt a Cost Per Thousand Impressions (CPM) model - or perhaps translate the Cost Per Click to the advert itself, so that the advertiser pays for each click on a video advert.

Either way, this will mark something of a departure for Yahoo!, which has until now seen its marketing almost entirely dominated by pay per click models. Its move into Rich Media provides a fresh range of delivery options and pushes it closer towards a serious, concerted challenge to Google’s vast array of online media offerings.

Last month, Yahoo! bought online video editing website Jumpcut and has now announced its intention to use that new acquisition to channel , CBS television news to its portal. Setting out his vision for the future, chief executive Terry Semel said: “Our goal is to make video as ubiquitous as text on Yahoo!”

Its continued acquisition of firms in the video sector certainly seems to indicate that this is the case and the firm is confident that it can build on the success of sites such as YouTube to make significant sums of money.

If the future is in video, then online advertising could be set to see even further growth. It has recently been noted that the online ad industry is growing at an exceptional rate, but harnessing the power of video online could see the sector go through the roof. Even television may find itself being pushed into second place in the advertising stakes, something which the medium has not seen since its early days, meaning that Yahoo! could be on the verge of taking on Google head-to-head for the title of king of the web advertisers. Much will still depend, however, on how Google uses its latest weapon, YouTube, to keep its strong market position.

Article Written Exclusively by AdFero for Seriously Business

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