Online Video Ads Growing, but Will They Get Smarter?
Advertising in the realm of online videos has become a popular and important topic that has been highlighted with Google’s recent YouTube deal. There are those who foresee more clouds than sunshine in this medium’s future (Mark Cuban), and then there are those who foresee a rewarding waterfall of green (Google). But are these perspectives mutually exclusive? Not really.
According to a recent forecast by eMarketer, online video ad spend is expected to reach $410 million for 2006, which is an 82% jump from 2005. This figure is projected to reach $1.3 billion by 2008 and a whopping $2.9 billion by 2010.
Despite these big numbers, the fact remains that online video ad spend will still account for a small fraction of total online ad spend. Online video ad spend will be 2.6% of total online ad spend in 2006, 6.0% in 2008, and 11.5% in 2010.
These numbers pale even further when compared to total television ad spend. Online video ad spending will only be 0.6% of TV ad spending in 2006, 1.6% in 2008, and 3.3% in 2010.
Of course, this big financial potential is pretty much meaningless if there are no eyes willing to watch, interact with, and respond to ads placed in or beside online videos.
According to recent numbers released by Forrester Research, 37% of consumers say that they have seen pre-roll ads in online videos, while 22% say that they have seen ads placed beside online videos. An additional 14% say that they have seen ads placed within or after an online video.
These numbers indicate that there is awareness of these ads placed before, in, after, or beside online videos, but are consumers actually watching them?
A Forrester survey taken in 2005 revealed that about 75% of online consumers ignored ads placed before or within online videos they have seen in the most recent month. In addition to this figure, 72% of online consumers indicated that online video ads are too long, and 90% say that they “seldom” or “never” clicked on these video ads.
This is partly due to the fact that advertisers are not adjusting their messages for the online video medium, and are merely recycling their 30- and 60-second commercials for these online videos.
Advertisers and content providers are adapting by honing in on a 15-second ad standard, though there are those that contend that consumers would be more willing to deal with longer ads if they become more relevant and engaging.
Google will surely be looked to as a pioneer in finding that elusive balance between length, relevance, placement, and level of entertainment with regards to these online video ads. But there is the real possibility that YouTube users will be turned off by major pre-roll ads, which they have not been forced to deal with yet.
The online video advertising realm is still nascent and is only in the beginning of its maturity stage. As advertisers wise up to the notion that commercials run on TV will not always be received as well on computer screens, and as content providers figure out the best ways to place these ads, consumer responses will likely respond accordingly.
Still, those like Cuban maintain their wariness about heavily investing in these viral ad campaigns, saying that 99% of the money thrust in this direction is wasted.
“User-generated content is not going away. But do you want your advertising dollars spent on a video of Aunt Jenny watching her niece tap dance?” he asked advertisers in late September.
If the ad is brief, somehow relevant to, and as engaging as the video of Aunt Jenny and her niece, the answer could be “yes.”
Sources:
http://www.emarketer.com/Article.aspx?1004251
http://www.mediaweek.com/mw/news/print/article_
display.jsp?vnu_content_id=1003352395
http://news.zdnet.com/2100-9588_22-6121034.html
