Report: Pre-Roll Still Controls Ad Budgets

Nearly all ad executives and media buyers plan to increase spending on online video this year, according to new research from branded video ad network BrightRoll. Indeed, 94% of respondents said they plan to increase their spending on video -- up from 87% last year.

But where do they plan to spend their creative budgets? The majority -- 54% -- plan to spend them on interactive pre-roll, as opposed to branded entertainment, at 20% -- consumer content or webisodes, at 15% -- or other forms of creative content, at 11%.

Overall, 83% of respondents said they are receiving greater value for their spend this year than they were last year, which they attribute to lower rates, better targeting, more access to better inventory, and the emergence of performance-based metrics like cost per engagement and cost per video view.

"Online video underwent a cycle of massive innovation in 2009, and has matured into a highly effective platform for advertisers to connect with their target audiences online," said BrightRoll CEO Tod Sacerdoti.



More than half -- 56% -- of respondents stated that they view online video advertising as either "more effective" or "much more effective" than other forms of advertising.

Targeting was identified as online video's most valuable asset by 32% of respondents, followed by ad unit format, at 21% -- reach, at 19% -- price relative to TV, at 10% -- and ability to reuse creative, at 10%.

Meanwhile, 45% of respondents said they would most like to base online ad spend on cost per video view, while 34% said cost per engagement, and 16% said cost per impression.

In 2009, advertisers, on average, bought 42% of their online video through ad networks, 43% of their video directly through publishers, and only 15% through portals.

The San Francisco-based BrightRoll recently said it achieved profitability nearly a year ago, but that it could still use additional funds to expand its technology platform, along with advertiser and publisher operations worldwide.

As a result, in February, it raised another $10 million in Series C financing led by Scale Venture Partners. That brought the company's total venture funding to $16 million since its launch in July 2006.

Led by consumer goods, automotive, media and entertainment, interactive marketing will near $55 billion by 2014, according to Forrester. Among other factors, the researcher attributed the increased spend directly to the evolution of online video.

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