• by Ross Fadner , May 15, 2012

With upfront season in full swing -- and many TV watchers predicting record commitments to new programming from ad buyers -- VideoNuze’s Will Richmond says that now is the perfect time to remind everyone in the media ecosystem about live television’s inexorable decline. DVR penetration is approaching 50% of U.S. households, which he says means “the days of forcing viewers to tolerate almost a minute of advertising for every two minutes of TV programming they viewed are fading.”

Thankfully, online video advertising is maturing at precisely the right time, he says. So why should content providers and advertisers alike be optimistic about online video? Richmond provides four main reasons:

1.     Most online video ads cannot be skipped. Viewers also tend to be more tolerant of the ads they see in videos because online streams come with fewer ads.

2.     With online distribution, the TV network or content provider is able to set the ad policy, whereas with cable TV, the pay TV provider sets the ad policy.

3.     The movement towards enhanced targeting and analytics will increase the value of video advertising. Competition will also lead to greater transparency, which ultimately means better metrics for advertisers.

4.     Because clicking on a video is a lean-forward rather than lean-back action, video advertising can move into the realm of interaction, or engagement. If done right, Richmond says this should lead to better ROI and a better user experience.

Richmond acknowledges that video advertising still has measurement and structural issues (particularly on the agency side) that prohibit marketers from being able to reach key objectives (like buying a quality audience at TV-like scale). Nevertheless, as live television viewing continues its slow march toward becoming completely on-demand, and as these issues are sorted out, he says online video advertising will become more and more attractive to both buyers and sellers.