online video ads trends

Digital MediaWeb Video Takes Off, Ads Trail

by Louis Hau, 09.20.06, 6:00 AM ET originally posted on Forbes.com

Years after it was originally supposed to arrive, Internet video is here and making up for lost time. Steve Jobs has made it the focus of Apple Computer's new strategy. Nearly every major media outlet is obsessed with figuring it out. And video file-sharing site YouTube, non-existent two years ago, now has buzz rivaling that of the original Napster.

So it makes sense that ad dollars should follow the new medium. Market research firm eMarketer predicts that U.S. online video advertising is expected to total $385 million in 2006, up 71% from a year ago. That's more than twice the growth rate of overall U.S. online advertising spending, which is projected to reach $16.7 billion this year, up 34% from last year. Online video advertising could hit $1 billion by 2010, says JupiterResearch.

But advertisers and Internet video aren't a perfect match yet. The main problem: While Internet users now seem happy to watch clips on their computers--a recent poll says that half of them have done so--they may not be watching the kind of stuff that marketers want to buy ads on. YouTube boasts that it has stored 100 million video clips on its site, but the anything-goes nature of them--home-brewed stuff mixed with clips of copyrighted, unauthorized material--makes some advertisers wary. Meanwhile, professionally produced content you can find at established Web sites has a harder time drawing eyeballs.
"Advertisers and Web publishers have been waiting for consumers to watch--it's been a pretty slow build,'' says Jeff Lanctot, vice president and general manager of Internet advertising agency Avenue A/Razorfish, a subsidiary of aQuantive. "The interest and demand of online advertisers has outpaced that of online consumers."It's a point of view seconded by Greg Stuart, the Interactive Advertising Bureau's outgoing chief executive."The big stumbling block now is continued consumer adoption of video online,'' Stuart says. "If you talk to the online publishers, they say they cannot get enough video impressions to sell. There's not enough relative to marketer demand.''

Ian Blaine, co-founder and chief executive of thePlatform, a Seattle provider of digital media services says some advertisers have told his clients that they would buy far more advertising if only the clients had enough impressions to sell. It's a problem rooted in both the need to digitize more content as well as in the difficulty of drawing the critical mass of viewers necessary to make major ad deals worthwhile, he says.

"For a big campaign to work, they need 100 million unique impressions,'' he says."That's sort of a bar for it being interesting. There are plenty of people watching video. The challenge is where are they watching it. It isn't a lack of eyeballs but a lack of aggregated eyeballs."Meanwhile, the relative scarcity of online video ad inventory has caused the cost per thousand impressions to climb about 15% to 20% this year, estimates James Kiernan, vice president and associate director of digital media and innovation at MediaVest USA in New York.While a 30-second ad during a prime-time broadcast TV show typically fetches a CPM rate of about $20, a 15- or 30-second online video ad currently commands a CPM of around $20 to $50, Kiernan says.Another stumbling block for mainstream advertisers is figuring out what kind of ads a Web user can stomach. Most of the video on the Web runs for just a few minutes. That means most Web sites with video content dare not tack on more than one "pre-roll" ad, which run before the clip itself, for fear of scaring off viewers. And some advertisers won't use the ads at all.
Toyota Motor's Scion subsidiary is an intriguing holdout, considering that its target market of 18- to 30-year-olds makes up an important chunk of the online audience. But while Scion's marketing team will sponsor concerts, film series and even video game competitions, pre-roll online video ads aren't part of the strategy, says Adrian Si, the company's interactive marketing manager.

Focus group surveys suggest that Scion customers frown on being forced to watch an ad before a movie preview or whatever video content they're trying to watch, he says. "We feel that's just way too intrusive."

But online video gives advertisers some distinct advantages. It generally offers advertisers a more precise way to reach consumers than television does. In addition, online video is what marketers dub a "lean-forward" medium, reaching viewers who are actively engaged with what's appearing on their computer screen rather than slumped on a couch. Video ads, which are usually paired with a nearby banner ad that viewers can click for more information, typically enjoy very high click-through rates, says Patrice Varni, director of Internet marketing for Levi Strauss.The company uses a combination of pre-roll video as well as animated banner ads featuring video content. "We feel we get a consumer who engages with us more deeply,'' Varni says. "It takes it one step further than TV.''
And plenty of conventional advertisers are willing to pay up as well. Chase Card Services, a subsidiary of JPMorgan Chase, has advertised on Time Warner's CNN.com and Reuters.com. The company likes online video ads because it provides an appealing alternative to banner ads, which often have to vie with many other ads on the same Web page to gain the attention of Web surfers, says Manning Field, senior vice president of branding and advertising for Chase Card Services."The fact is pre-roll is not cluttered when you compare it to other types of environments," he says. "Usually, there aren't five or six ads. It's usually as an exclusive sponsor."And sites that specialize in YouTube-style "user-generated content" have been seeking ways to accommodate marketers' concerns. For instance, video-sharing website Revver categorizes all of its content to enable, say, a skateboard maker to advertise on skateboard videos. Revver video ads don't appear as pre-rolls but rather after the conclusion of a video clip. Even then, a viewer must click to start the ad. "You can get very, very targeted advertising opportunities, really take it to a very fine granularity,'' says Revver founder and Chief Executive Steven Starr.Revver videos can be embedded in other Web sites, which allows advertisers to take advantage of popular video content that spreads virally. Starr says that "allowing content to move freely across the Internet and monetizing the content wherever it goes'' is where the future lies."The redistribution of the file itself is where the business is heading,'' he says.Meanwhile, YouTube, the kingpin of user-generated content sites, has set up "brand channels" for advertisers. General Electric's NBC Universal, Warner Music Group and News Corp.'s Fox Broadcasting Group have been among the first to sign up, using YouTube as an advertising vehicle without directly associating themselves with content they hadn't produced themselves. And this week Warner Music has signed a revenue sharing agreement with YouTube.

Online video statistics

webcasting business model

Posted by Peggy Miles in Webcasting Digest

The market for online content services worldwide is expected to expand by a
factor of 10, growing from about 13 million households during 2005 to more
than 131 million households by 2010, reports
<http://www.instat.com/press.asp?ID=1722&sku=IN0602973CM> high-tech market
research firm In-Stat <http://www.in-stat.com> (via
<http://publications.mediapost.com/index.cfm?fuseaction=Articles.showArticle
&art_aid=46364> MediaPost). Of all broadband households today, 12.8 percent
are already regularly viewing professional content via online content
aggregators. The number of broadband households is expected to double
between 2005 and 2010, to more than 413 million
In-Stat's research, "Online Content Aggregators - AOL, Google, Yahoo!, MSN,
Apple - Slowly Defining the Future of Television," covers the worldwide
market for online video services. The report asserts that consumers will
very soon be able to access, on demand, a vast store of video programs.
In-Stat predicts that this consumer-controlled delivery will be dominated by
major content aggregators like AOL, Google, Yahoo, MSN and Apple.
"The future of television is slowly being defined online, where the big
internet portals are finding ways to blend professional video with their
high-touch services that follow consumers from screen to screen during the
course of a typical day," says report author Gerry Kaufhold, In-Stat
analyst.
"AOL, Google, Yahoo, MSN, Apple, major broadcast TV networks, pay-TV
services and local TV stations are all working on ways to blend their video
assets with personalized TV services."

Some new user-generated webcast services

Broadsnatch: http://www.broadnatch.com
Eyeka: http://www.eyeka.com
Gkko: http://www.gkko.com
vSocial: http://www.vsocial.com
Guba: http://www.guba.com
YouTube: http://www.youtube.com (claimed to serve 40 million videos a day).

US Broadband Consumption

Broadband Market Still Poised for Growth› › › Broadband
By Enid Burns, June 2, 2006

Despite talk of a slowdown in broadband adoption in 2005, high-speed Internet access reaches 60 percent of U.S. households. According to "Broadband Access and Services in the Home 2006," a report released by Leichtman Research Group, the market can expect continued growth.
Forty percent of current narrowband, or dial-up, subscribers say they want to upgrade to a broadband account. Barriers to adoption, such as cost and availability in rural areas, no longer keep narrowband users from upgrading to high-speed.
"The number of broadband subscribers in America will nearly double [in the next five years], so there's a huge opportunity," said Bruce Leichtman, president and principal analyst for the Leichtman Research Group. "With lower entry prices, particularly with DSL, the migration from dial-up is much quicker than many expected."
Cable holds a lead in the number of subscribers. An earlier report released by Leichtman said cable operators supplied 25.8 million broadband subscribers, and DSL serviced 20.2 million out of 46 million high-speed Internet subscriber accounts. The 46 million subscribers account for 94 percent of the market.
Cable subscribers tend to be in households with higher incomes, according to the report. Thirty-seven percent of households with annual incomes over $75,000 subscribe to cable versus 27 percent of DSL subscribers. Of households earning $30,000 to $75,000, 21 percent subscribe to DSL, and 18 percent to cable.
"Income is the greatest predictor of broadband penetration, and cable does very well among the high-income groups," said Leichtman. "Where DSL has performed very well in the past year is in the middle class where they have taken a market share lead over cable."
Data are based on a telephone survey of 1,600 randomly selected households from throughout the U.S. Additional data are derived from provider-side research.

source:
www.clickz.com/stats/sectors/broadband/article.php/3610546

New Online Video Consumption Statistics

*Video Consumption Up Heavily: comScore*
ClickZ News*
By Zachary Rodgers<http://www.clickz.com/experts/contact_author/index.php/11093_3608446>
May 24, 2006
The number of Internet users watching video online grew an impressive 18
percent between October 2005 and March 2006. That's according to comScore's
first ever analysis of U.S. Web users' online video viewing habits, drawn
from its new Video Metrix service.
In March, U.S. Internet users initiated a total of 3.7 billion video content
streams; and they watched an average 100 minutes of video content each
during the month, compared with 85 minutes back in October.
Men initiated 52 percent of those streams, women 48 percent; splitting
genders along roughly equal lines. But men spent far more time with the
content, averaging two hours of viewing time during the month, compared with
women's hour-and-twenty. Not surprisingly, males 18 to 34 were most
engrossed with online video, averaging 140 minutes of video consumption.
But while certain demographic sets consume more video than others, the
report's biggest surprise is that people from all ages and walks of life are
eating it up, according to Erin Hunter, comsCore's EVP of media and
entertainment.
"There are skews by age, but there isn't any group that's not doing it," she
said. "It's not just college kids. It's also the older demographic, and
clearly it's males and females both. In terms of content, we see
entertainment and sports and news all with pretty strong rates of
viewership."
Additional data from comsCore's Video Metrix service includes that 16
percent of video consumption takes place during prime time hours, and 22
percent on the weekend. Forty-two percent of Web users watch video on an
entertainment site, and about 33 percent watch on a portal. In a blow to
human resources managers everywhere, the workplace is the favored
environment for watching video. People spent about an hour a month watching
from work environments.
comScore's new Video Metrix service will provide customers with monthly
reporting on the demographics and video consumption habits of
U.S.-basedInternet users, presenting interactions with both content
and ads. The data
are drawn from comScore's existing technology and panel of 1.5 million
Internet users, though the video data comes from a smaller subset.

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