VivaKi's The Pool aims to raise China's online ad standards

But will this initiative finally be able to help online video in the country reach its huge potential?

Advertising through online video portals in China is extremely attractive. Unfortunately, there are only limited resources to show that the budget spent on this online platform is used effectively and has visible results.

"Our revenue last year was US$29 million, mostly from ads," says Eddy Wang, general manager of marketing planning at Youku, one of the country's leading online video platforms. "But it's important for a third-party voice to tell the advertisers how to select effective ad formats."

Yifei Li, country chair of VivaKi Greater China explains that The Pool is a joint effort to bring together the resources from leading players in China's online video value chain. She says the programme is aimed at "solidifying the online video ad industry to create the industry standards for new, scalable online video advertising models."

Apart from online portals including Youku, Tudou, PPS.tv, PPTV and Ku6, The Pool has also seen support from major brands including Unilever, L'Oreal Paris, Shanghai General Motors and General Mills.

"The industry has been using online video as an advertising media for more than two years," says Evelyn Wang, chief sales officer at video platform Tudou. "The clients rather than media owners initiate most of the media planning and buying. In particular, international brand clients have been consistently investing in online video ads. The growth is fast and steady."

Instead of engaging with media agencies, many clients at the moment prefer to deal directly with media owners. The problem, though, is there is no benchmark to say what is a good price or ad format among the millions of choices available.

By providing qualitative and quantitative metrics, The Pool aims to respond to this challenge and thereby increase investment into online video. According to Vivaki, its first research results are scheduled to be issued in October.

The success of this and other projects will depend on collaboration. "It is reasonable for media and clients to share the expenses," says Wang. "If you want real research, you need to have the necessary advertisers and budgets to work with and the media agency is an appropriate company to do this."

Next on VivaKi's list of study areas for The Pool is expected to be cross media research that involves both television and online, which Huang thinks can only benefit the further development of online video.

"People in China, especially the netizens, are changing very quickly," says Wang "There is always new media coming up and it is essential for the industries to work together."

This article was originally published in the 17 June 2010 issue of Media.