September 23, 2013
September 24, 2013
Online video continues to grow, but it could do a lot better. As a marketing channel, several big problems continue to keep it from reaching its full potential, and some of these issues have been plaguing the industry for years.
This year, Nielsen’s TV ratings showed declines for all broadcasters, some by more than 20 percent. So why didn’t this result in a windfall for Web video? The truth is online video’s growing pains are keeping many advertisers from simply redirecting their TV dollars towards video.
Unlike in display, the seller is firmly in control of the video market. There is still far more demand for premium/quality inventory than there is supply, and that disconnect has resulted in some shady practices, particularly among third parties that resell video inventory. For buyers, video is expensive, extremely complex to buy at scale, and those working with third parties often have no idea where their ads are being shown. Some of these issues, like video’s high CPMs, will work themselves out over time, while others, like transparency, will take a concerted industry effort to stamp out.
Meanwhile, despite the fact that brand dollars are for now sticking with TV, new technologies like Google’s Chromecast, disruptors like Barry Diller’s Aereo and the fact that many consumers are sick of paying for overpriced packages of thousands of cable channels give cause for hope. If consumers ditch television en masse, then TV advertisers really will be forced to move to online video—whether either industry is ready or not.
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