Nielsen: Broadband Video Provides Fertile Ground for Advertisers

  |  January 25, 2007   |  Comments

A study by Nielsen Analytics and Scarborough Research finds broadband video expands the reach of traditional TV.

On the same day Google announced that YouTube video results will start appearing in the Google Video Search index, a new study from Nielsen Analytics finds that the red-hot broadband video space can provide a fertile market for advertising revenue.

The study, conducted in partnership with Scarborough Research, suggests that broadband video actually extends the reach of traditional television and provides a perfect place to target advertising to a "young, affluent, highly educated" consumer with round-the-clock access to high-speed Internet.

The findings come at a time when copyright ownership issues threaten to stunt the growth of video sharing sites that provide easy-to-use tools for users to upload and share clips. Some video content owners have served YouTube with takedown notices when copyrighted content appears on the site, but according to the Nielsen study, television stations should look at the benefits of embracing the model.

"Programmers have the opportunity to create new revenue models to benefit content owners and their affiliated stations” said Larry Gerbrandt, general manager and SVP of Nielsen Analytics. Gerbrandt, who co-wrote the report, said ad-supported video distribution can be easily adapted to the broadband Web audience and, in some cases, may even be superior to existing models.

"With broadband streams, for example, fast forwarding through commercials can be disabled making it more likely the consumers will watch the spots and possibly interact with them," Gerbrandt added.

During the study, the researchers found no evidence that the availability of video clips online had a negative impact on traditional television watching. It found that videos watched on computers and handheld devices actually expand the audience of traditional TV programs.

"Advertisers and programmers using broadband have a unique advantage," Gerbrandt said, emphasizing that advertising models can be customized and managed in a high-speed Web environment and point-and-click interactivity can be embedded into the program to enhance user engagement.

In addition to enabling potentially higher CPM rates, this can be accomplished without taking viewers away from the enjoyment of the program, argued.

The study also found that viewers online prefer short ads served with video clips but the market is "split" between 15-second and 30-second pre-rolls per program segment.

On the value of targeting broadband consumers, the study found that there is a clear generational divide in broadband adoption with the lucrative 18-34 demographic representing 34 percent of those with broadband connectivity in their household.

The findings come as Google officially closed its purchase of YouTube and pushed ahead with a plan to integrate the site's video clips into its flagship search engine. The move could broaden YouTube's audience, and expands the inventory on Google Video.

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