Continued Growth Expected for Video Ads
According to BrightRoll's Q1 2009 Video Advertising Report, polling nearly 150 US advertising agencies with a special focus on video advertising, 87% of agency executives plan to spend more of their online advertising budgets on video in 2009, EMarketer predicts Online video advertising to grow 45% in 2009, reaching $850 milion, and 71% of survey respondents view online video advertising as a complementary medium to television.
| Respondent View of Online Advertising In Conjunction With TV Advertising | |
| View | % of Respondents |
| Complementary | 71% |
| Not relevant comparison | 13 |
| Competitive | 12 |
| Other | 4 |
| Source: BrightRoll Video Ad Report Q1 2009, May 2009 | |
53% of respondents expect instream CPM prices to be marginally lower one year from now, and 20% think the price of pre-roll will drop to half of what it is today. The most important factors in CPM pricing, as seen by the respondents, are:
- 45% say surrounding content
- 27% say click through rate
- 25% say site placement
- 3% say length of at
BrightRoll's average CPM (cost-per-thousand impressions) numbers from the industry at large confirm the trend:
- Average pre-roll CPM: Q408 vs. Q308: down 12.5%
- Average pre-roll CPM: Q408 vs. Q407: down 25.0%
- Percentage of campaign revenue from rre-roll: Q109 (80.6%), Q108 (63.1%)
The drop in CPM pricing "could be a good thing," because cost may have been limiting growth, TechCrunch observed, saying if prices come down further to $7-9 instead of $20, they'll be more comparable with TV commercials, which range between $15 (primetime) to $50 (niche, targeted cable channels).
The survey found that reach and targeting capabilities are the aspects of online video advertising that respondents say their clients are most concerned about:
| Online Video Concerns | |
| Concern | % of Respondents |
| Targeting capabilities | 28% |
| Reach | 24 |
| Price relative to TV | 17 |
| Ability to reuse creative | 9 |
| Ad unit format | 7 |
| Other | 15 |
| Source: Source: BrightRoll Video Ad Report Q1 2009, May 2009 | |
Survey respondents would like to see more behavioral and contextual advertising in 2009, so that search and display marketers can easily tailor ads. The report opines that agencies must alter practices to get the most out of targeting, instead of using repurposed TV-specific spots for the Web.
| Type of Targeting Respondents Prefer | |
| Targeting | % of Respondents |
| Behaviorial | 38% |
| Contextual | 27 |
| Demographic | 17 |
| Deep-geographical | 12 |
| Content | 6 |
| Source: Source: BrightRoll Video Ad Report Q1 2009, May 2009 | |
Both pre-roll and in-banner ads were regarded as preferable units, with one out of two respondents saying their use of one or the other depended on the situation and advertiser goals. Reasons for their preference, according to the survey, are guaranteed impressions, overall engagement, and noticeability.
The study finds that 41% of the respondents are more likely to buy inventory from an ad network, or 51% from a portal because of the key differences between display and video advertising:
- Portals don't offer "nearly" the reach in video as in display
- Portals are priced at high end of market, whereas in display they dominate both highly priced direct buys and remnant inventory
- Portals don't sell significant volume of video inventory from their owned and operated properties
| Primary Perceived Benefit Buying From Video Advertising Network | |
| Benefit | % of Responses |
| Lower price | 46% |
| Campaign execution efficiencies | 28 |
| Higher quality content | 12 |
| Video inventory without display or sponsorship bundling | 11 |
| Delivery speed and/or budget fill | 3 |
| Source: Source: BrightRoll Video Ad Report Q1 2009, May 2009 | |
Pricing for video ads also varied depending on where they were located on-screen, says eMarketer, in a recent release. Online video consultancy LiveRail estimated that overlay ads ran CPMs of $7.40 and in-stream ads were priced at $16.40 in Q4 2008. AccuStream iMedia Research put the average 2008 figure as high as $35 for premium preroll online video ads.
| Average US Online Video Advertising CPM, 2008 | |
| Type | CPM ($) |
| Premium preroll | $35 |
| Preroll | 25 |
| Ad network inventory | 13 |
| In-banner video impressions | 11 |
| Source: AccuStream iMedia Research, Jan 2009, from eMarketer, May 2009 | |
The most surprising finding of the survey, Marketing VOX said, was the lack of data and effort around video advertising efficacy, noting that 87% have not performed any in-house research around their online video campaign efficacy.
A recent Forrester report concluded that interactive advertising is heading for growth over the next seven years, and Nielsen Online presents most recent data on video usage on line.
Overall online video usage and top online brands ranked by video streams for April 2009. Year-over-year, total streams, streams per viewer and time per viewer were up, led by a 58% growth in time per viewer.
| Overall Online Video Usage (U.S.) | |||
|
| Apr-08 | Apr-09 | Percent Change |
| Unique Viewers (000) | 119,626 | 116,691 | 2.5% |
| Total Streams (000) | 7,613,847 | 9,452,996 | 24.2% |
| Streams per Viewer | 63.6 | 81.0 | 27.4% |
| Time per Viewer (min) | 130.1 | 205.7 | 58.1% |
| Source: Nielsen Online, May 2009 VideoCensus (Includes progressive downloads and excludes video advertising) | |||
To download the BrightRoll PDF report, please visit here.
JACK LOECHNER
Center for Media Research
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