Marketers Slicing from TV Budgets for Online Video in 2012
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.