For about a year now comScore has been calling for more ads in online video. At last year's OMMA Video conference in New York, their analyst Tania Yuki first laid out the notion that her colleague Dan Piech advanced at last week's OMMA Video show in San Francisco: the ad load online is but a fraction of what viewers are accustomed to on TV. Worse, the growth in video streaming has so outpaced the rise in digital video ad spend, that the revenue realized per video has declined.
As Piech outlined, the $324 billion in video advertising in 2006 was underwriting 63 billion video views that year -- or 7-cents a video. In 2010 441 billion streams attracted $1.4 billion in advertising or 4-cents a video.
Argue as you like about what inventory really is attracting most of that money and whether such raw calculation reflect the increased value of longer form media online. The fundamental ad load of online is lower. Across all online video viewing only 1.6% of our time is spent watching ads while 25% of TV viewing is really ad watching. Pull user-gen video out of the equation and just focus on entertainment content, where much of the long form content dwells, and the needle only moves a bit. Only 5.3% of online entertainment video viewing time goes to ads. Focus only on long-form content, Piech showed, and we still see an ad load of only 8.5%. For all of that lesser load, however, only 42% of online video viewers say that fewer ads is one of the reasons they watch TV shows online.
Now, comScore has been pressing this point about the under-monetization of online video for a while now. Consumers will tolerate much higher levels of advertising in longer form video especially than they get and than many publishers dare serve. But one of the trends that comScore is seeing this past year is that user tolerance of video advertising may actually be decreasing rather than increasing.
In studies from 2009 and 2010 asking how much advertising was acceptable in a given hour of programming. The sweet spot in 2009 seemed to be somewhere between 6 and 7 minutes. In 2010, the same survey suggested a downward shift to between 5:30 and 6 minutes. "Are we seeing the expectation of advertising actually decline?" Piech asked. "Individual by their own admission were saying we want fewer and fewer ads, but we are still delivering much less than they say they tolerate. Are we conditioning our users to fewer and fewer ads," he wonders.
Well. I am not so sure. It seems as if the stated tolerance of ad load by consumers is about at parity with the load they will get from most long-form TV experiences on the Web. When you parse the numbers coarsely then adding ads makes sense.
As the guy who actually gets paid in part to find and watch videos from a lot of different sources, I can tell you that the consumer perspective is different and very site specific. For me the frustration with online video advertising comes in the lousy value exchange on shorter form video, especially news and information clips. In just the past week, and at major media outlets, I have been sitting through relentless :30s spliced onto news clips that are under a minute. Worse, the frequency capping is either broken or simply disrespectful. Making a user sit through the exact same :30 in front of every minute-long content clip at a given site is maddening and has to diminish overall use.
The straight up ad load stats don't tell the whole story of consumer interactions with online video content. When ad sizes are so mismatched with the value of the content (mainly to accommodate repurposed TV spots) the environment feels broken or just immature.