Demand for pre-roll video is boosting the cost. Fear not. Underscore Marketing's president has a solution for video-hungry advertisers.

We've all had it happen to us. We present a media plan with pre-roll video components and while we're waiting for client approval, another advertiser swoops in and books the inventory. Or maybe we never got the chance at the inventory in the first place; an RFP sent out in hopes of acquiring some contextually relevant video placements comes back with a bunch of line items that read "sold out."

Whatever the case may be, the signs are all around us that there's less pre-roll video inventory available than clients would like to buy up. As advertisers fall over one another for their shot at locking up valuable video placements, CPMs are climbing higher and higher. The good news is that there's a ceiling to this.

Or at least there should be. After all, there' more than one way to skin a cat, and there's also more than one way to deliver a video impression.

For instance, one might consider the less-intrusive in-banner video format. Most ad-supported sites would be happy to take a Flash banner with video and user-initiated sound. With a choice between paying premium prices for pre-roll and a much more reasonable price for banner rotations, it might be worth it to go with the in-banner video. There are a number of reasons you might want to do this.

#1: Cost effectiveness
Let's say your client has a 30-second video it would like to run. The sites you're considering for your media plan are proposing pre-roll CPMs of $35 to 40, as inventory is in demand. Meanwhile, their average banner CPMs are coming in at $8. Your agency suggests an in-banner execution that plays the video within the banner, but requires user interaction to activate the sound from the spot. Most people who view the banners will thus get the visual impression and a percentage of them will get the full experience by activating the sound.

Let's say incremental serving fees from video boosts your in-banner CPM to $10, which coincidentally makes the math easier. Is one pre-roll video impression worth four in-banner impressions? I doubt it's worth that premium. In-banner is likely the more cost-effective choice.

#2: Intrusiveness
A top complaint concerning pre-roll ads is that users need to wait 15 or even 30 seconds for an ad to play before they receive the video content they requested. From a flow experience standpoint, this is highly intrusive, as it places the ad directly in the way of the requested content.

In-banner video, on the other hand, is less intrusive. Ads can play alongside content without interrupting the user's flow experience. Depending on how your brand views the user experience, perhaps the less-intrusive approach is the better one.

#3: Targetability
Video targeting is coming along, but it's in its infancy when compared to that of banner targeting. While video sites and networks struggle to deliver inventory in context, banner sites and networks can deliver contextual relevance in spades. And that's just one targeting criterion. There are a lot more. You will find that in-banner video is more easily targeted contextually, behaviorally, geographically or any other way you want to slice it.

#4: Reach
Ever notice how most sites have very defined areas in which they run video? Meanwhile, ad banners can run on most pages of a website. This has significant implications for reach and frequency.

It's highly likely that a content site running both pre-roll video and banner advertising will be able to achieve higher reach running banners than it would running pre-roll. Think about it: Video can run on fewer pages than banners, thus decreasing coverage of the total site's audience. Measuring reach and frequency specific to pre-roll video campaigns is a goal for the research companies that is someplace off in the distance. Meanwhile, predictive reach and frequency tools for online ads like banners have been around for years.

Choosing the right format for your video asset is thus critical to how you'll achieve success with an online video campaign. Do the math, and think about how valuable targetability and reach are to the campaign as well. This will help you see whether or not paying premiums for pre-roll is the right thing to do for your brand. 

Tom Hespos is the president of Underscore Marketing and blogs at Hespos.com. Read full bio.