Where Is Online Video Going? Nielsen and an Online Creator, On Content and Ads

In this, the Great Period of Sorting Out of Online Video, there’s this recognition, depending on what you’re reading, that online video ad growth is happening and wonderful, and on the flip side of the coin, recognition that ad growth is happening but at prices so low that things are, well, awful,

In the latter category is a nicely done post today on in which Andrew Baron, founder of Rocketboom and “Know Your Meme” suggests rather strongly that YouTube has had a horrible effect on the video ad market. That is the nice way to put it. To put it the way he put it, and all the parentheticals and CAPS are his :

“YouTube has literally DESTROYED – with a capital DESTROYED – the video ad market. What started out as a standard and relatively reasonable benchmark of $25 CPM (FYI, CPM is the cost to an advertiser for 1,000 views of an advertisement) for both broadcast sales and online video sales just a few years ago, is now down now to around a $2 take home this year.



But we’re not done yet!

If you’re part of a new Multi Channel Network (aka MCN), take off another % for the network. If you signed up through a third-party to be part of that network, go ahead and (in most cases) cut out another % to hand over to them.”

Baron continues and more or less concludes there is no way out, which, he says, is why the hot properties in online video, from a content standpoint, avoid the ad model whatsoever.  He writes:

“Consider where the momentum is right now online for the industry.

  1. What is the best monthly subscriber platform that is winning by providing access to ‘the best comprehensive selection’? Netflix, which has no ads.
  2. What is the best pay-per download platform for TV shows in demand, on demand? iTunes, which has no ads.
  3. What is the best independent crowdsourcing way to fund? Kickstarter and, which both have no ads.”

 So there’s that. Also, Nielsen released new data that says globally, television is still where it’s at, though the absolute fastest growing ad source, by far, is online. But, notes analysis of the Nielsen data on, “In the first half of this year, Internet display ads only took 4.3% of all spend. In other words, for ever dollar spent on advertising by a brand, only 4.3 cents were online. As in years past, Internet continues to be the fastest-growing of all mediums, growing by nearly 27%, nearly six times as much as TV spend (which, yes, is also still growing, compared to declines in other traditional mediums like newspapers, magazines and cinema).”

A certain percentage of readers—about 90% from my experience--figure all the pro-TV stuff in this quarterly Global AdPulse View is strictly because the data comes from Nielsen. Conspiracy theorists are sure there’s something hinky in those Nielsen figures that TV accounts for 57.6% of all ad spend globally. But it’s undoubtedly just about true, just as it is that online ad growth is zooming, too.  Where’s it's going, how much you’ll be charging/paying and who’s doing the counting are all interconnected questions. That’s about where the biz seems to be now.
2 comments about "Where Is Online Video Going? Nielsen and an Online Creator, On Content and Ads".
Check to receive email when comments are posted.
  1. Ruth Barrett from, October 23, 2013 at 12:42 p.m.

    Gosh, could it be that online video ads are so intrusive and irrelevant, and now that there are options like subscriptions, consumers are running to ad free platforms and driving where the biz is going?

  2. Sam Simon from Cygnus Business Media, October 23, 2013 at 12:54 p.m.

    I think avoiding the CPM ad model is a strong consideration when looking at strategies to monetize video. Especially for content producers who serve a niche that aren't going to pull in millions of viewers each month. It takes a hefty investment to get to the scale needed to make that a profitable venture.

Next story loading loading..