Online Video's Environmental Impact

Earlier this year, one of the most anticipated 2008 presidential campaigns was launched with a videotaped online message.  The event was a good reminder of the power of online video to transform the way we communicate.  The adoption of video by the typically slow-moving world of politics also tells us that the transformation has moved well beyond the early adopters and is touching all parts of society.

Video's dramatic growth is expected to continue for years to come.  EMarketer says that from 2006 to 2010, the number of U.S. online video viewers will grow nearly 50%, to 157 million consumers.  And with this will come tremendous advertising opportunities.  In fact, eMarketer predicts that video advertising will grow 89% in 2007.   Online video is among the fastest -- if not the fastest -- growing ways for marketers to connect with consumers. 

Today video is a small piece of the overall online advertising pie.  But there are important opportunities right now for advertisers to begin building effective video advertising strategies that take advantage of this growth.



With the proliferation of video, one of the most important questions for marketers is where online video advertising dollars should be spent to best connect with consumers.  The Online Publishers Association's just-released "Frames of Reference" report makes it clear that, from site-to-site, video advertising results will vary.  There is a clear "environmental impact" with online video advertising.  Most notably, the study found that consumers on media sites are far more likely than those on portals or user-generated content sites to act on video ads.

The difference is pronounced among consumers who were driven to search for more information after watching a video ad.  Ads on branded media sites led more than one-third (38% magazine, 37% newspaper and 35% online-only news & info) of consumers to go looking for more -- while only about one-quarter of consumers on portals (27%) or UGC (24%) sites did so.

About one-quarter of consumers on magazine (29%) and online-only news and info (26%) sites went into a store to check out a product after viewing a video ad, while only 17% on portal sites and 14% on UGC sites did so.  And about one in five consumers on local broadcast, national broadcast and cable TV sites requested more information after viewing a video ad, while only 16% on portal sites did so.

The importance of site environment was reinforced by a unique concept testing program conducted as part of the "Frames of Reference" study.  A variety of ads and ad attributes were tested for how they impact key advertising and brand metrics.

If a consumer had a positive attitude toward an advertised brand, and liked the video content that the ad appeared within, brand consideration jumped 61%.  That reaction may be a somewhat predictable, but the strength of the response is impressive.  Even more remarkable is the finding that if the consumer's initial attitude toward the brand was neutral or even negative, brand consideration still rose 21% if he or she liked the adjacent video content.

Late last year the OPA conducted an examination of syndicated online data to determine how often audiences engage in specific activities important to marketers.  Once again, site environment proved to be a critical factor.

Across a broad spectrum of activities, media sites that make up the OPA offered a significant advantage.  In key categories -- including automotive, entertainment, financial, home, travel and B2B -- the  audiences on these sites more actively purchased goods and services, conducted online research and engaged in financial transactions, and often times spent more, than portal and search site visitors.

The recent Price Waterhouse Coopers/IAB report predicts that online advertising generally will grow greater than 10% a year through 2011.   And when you combine this with eMarketer's predication that, by 2010, one in ten online ad dollars will be spent on online video, there is no question that the opportunities are tremendous. 

What "Frames of Reference" tells us, however, is that the opportunities may not be consistent across the Web.  As marketers shift their focus to online video, it's important that they consider the environmental impact.  Different sites will clearly produce different results, with branded media sites leading the way.
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