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Online video viewing buoyed by multiple ad formats
Date: 28/11/2008
Smaller screens, bigger opportunities
To appreciate how far online video has come, consider a few contrasts between the 2008 and 2004 US Presidential elections. In the 2008 campaign season, primary debates were co-sponsored by YouTube, and questions from the public were submitted through the pioneering video-sharing site. In 2004, YouTube did not exist.
A huge video market is developing online. eMarketer projects that the US online video audience will grow to 190 million people by 2012, or 88% of the US Internet user population.
"After some false starts with ill-fated transactional experiments, online video content owners and distributors are pursuing a strategy that closely follows the standard TV business model," says Paul Verna, eMarketer senior analyst and author of the new report, Video Content: Harnessing a Mass Audience. "The bulk of online video programming is now supported by advertising, with ad formats ranging from in-stream ads (prerolls, midrolls and postrolls) to in-text and in-banner ads."
Although many consumers are loath to sit through ads when watching online video, they seem even less willing to pay directly for content. According to a study by The Diffusion Group (TDG), as ad-supported video grows the balance of the inventory will tilt toward longer-form content.
TDG analysts projected that in 2013, long-form video will represent 69.4% of ad revenues, up from 41.6% in 2008. Alternately, in the same timeframe, the share of short-form video will decline from 54.8% to 28.7%.
Of course, viewing online content on a television is still unwieldy, costly or both.
"Cable and satellite providers, ISPs, TV manufacturers and developers of set-top hardware have yet to come up with compelling solutions," says Mr. Verna. "However, once this domino falls (and it is almost inevitable that it will) online video will take a major leap into an interconnected future."
Main online video players
Recently, Google has announced it will let companies run video ads on YouTube search results. This will likely only bolster the extent to which these two players rule the online video space: Google Video and YouTube accounted for 44.1% of all online videos viewed in the US in July 2008, according to comScore Video Metrix.
Advertisers can bid to promote themselves via YouTube Sponsored Videos; the ad results will appear on the right-hand side of the YouTube search results with a small image and some text, writes The New York Times. As with Google search, advertisers can set a maximum price per click; they are charged each time a viewer clicks on the ad. How high the ad appears within the results depends on a number of elements, including not only how much the advertiser is paying per click but also how much interest the message has generated in the past, AP writes.
Source: eMarketer
WFA Comment: Use of online media features regularly as an agenda topic at WFA Digital Network meetings. WFA members can request more information on this working group from Robert Dreblow: [email protected]
