Marketers Slicing from TV Budgets for Online Video in 2012

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Brace yourselves, TV networks.

About two-thirds of marketers say they’ll increase their budgets for online video advertising in 2012, and some of them will be snagging that money from the TV ad budget.

That’s the finding of a study conducted by Break Media, released today. Of course, the big caveat is Break has a huge stake in the online video ad economy since Break Media Network is a large video ad network reaching more than 120 million visitors each month, and also owns Break.com, the popular humor video site. Even so, the study’s findings dovetail with those from marketers and research firms also expecting another robust year for online video ads in 2012.

Specifically, about 32% of advertisers who plan to up their online video ad spend in 2012 will take money from TV budgets, 54% from non-video display budgets, and 38% from organic budget growth, Break found in its survey of more than 300 decision makers at ad agencies and marketers. More than 90% of advertisers plan to use video ad networks in the year ahead and expect to allocate 20% to 41% of total video dollars through ad networks.

Interestingly, marketers may shift away from the cost-per-thousand model that has been the bedrock of TV and video advertising in favor of a cost-per-view model. Break said that model has doubled in use in the past year. The growth in the cost-per-view model likely comes from the increasing use of video ad networks, since that pricing model is most commonly offered by ad networks. Pre-roll is still the most preferred ad format, while mobile will be second, overtaking in-banner in 2012.

The expectations for 2012 stem in part from how video performed this year. Many advertisers plowed more money than originally planned into video this year. About 57% said they spent what they planned, 14% spent less and 29% spent more than they expected to in online video.

But online video will face obstacles in 2012, including difficulty measuring ROI and a lack of standard metrics. The ROI issue has been cited in many studies this year as a major hurdle, including most recently by Casale Media.

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4 comments on "Marketers Slicing from TV Budgets for Online Video in 2012".

1. Chris Stinson from Non-Given
   

   commented on: December 15, 2011 at 2:37 p.m.
   In watching thousands of online videos and hundreds of ads, I've never watched for more then a second the ad....if it takes any longer then the amount of time I could fast foward a VCR, I might skip the content too. Online Time is My Time. There is always other content.
2. Evan Petty from Snowman Productions, LLC
   

   commented on: December 15, 2011 at 3 p.m.
   Yea! It's about time the shift started. Mr Stinson needs to be reminded that if content creators don't have a way to recoup their investment, then there won't BE any content for him to consume. Shoot days aren't cheap, my friend. And that means advertising. Now we just need to convince the advertisers that they won't see any ROI if they just run the same crap online that they've been running on TV. Maybe then it'll be worth watching.
3. Doug Garnett from Atomic Direct
   

   commented on: December 15, 2011 at 5:06 p.m.
   So... About 20% of those surveyed are shifting some very small amount of money from their TV budgets? And the idea that 60% are increasing their budgets somewhat? Without specifics, this doesn't report anything siginificant. But, the survey looks to be yet one more sponsored survey - probably designed to create a groundswell, but offering no significant insight. There are important things to learn about in this topic. But the survey doesn't help.
4. Steve Yanovsky from Customer Focused Solutions
   

   commented on: December 15, 2011 at 5:30 p.m.
   It is about time the budgets started shifting. The eyeballs started to shift years ago. Why pay more for less when you can communicate your brand message in the medium for which your audience is demonstrating a preference. The content is getting better and better in the medium and the audience will continue to grow arithmetically. I wrote this blog post months ago on this subject. http://www.mediabizbloggers.com/steve-yanovsky/Why-are-Marketers-and-Agencies-So-Timid----Steve-Yanovsky.html

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