Watching the Value of Online Video Grow

I’ve always thought it fitting that the change in climate this time of year corresponds so precisely with the new fall television viewing season. For many, there’s no better way to spend a cool autumn evening than to curl up in front of the TV…except, perhaps, to curl up in front of the laptop.

This month, market researcher Morpace reported that Internet users between the ages of 18 and 34 now spend almost 25 percent of their viewing time online. Although 52 percent of total TV time is still represented by live TV, online is the most popular alternative, with half of all viewers watching some TV online in July of this year.

In fact, eMarketer says about 85 percent of 18 to 34 year olds watch online video at least once per month, while electronics marketplace Retrevo has found 23 percent of Web users under the age of 25 actually watch “most” of their TV online.

In order to take advantage of this behavior, buyers must consider incorporating online video in their campaigns. But there are plenty of other reasons to reallocate your offline ad dollars beyond reaching consumers where they are.

Online Video Ads Work

Earlier this year, Nielsen reported that video ads placed in full-length TV shows online have been proven more effective than their offline counterparts. It’s believed that consumers are more focused when watching online programming than they are with live TV. There’s plenty of fodder to support this argument; we all know the extent to which TV viewers multitask, surfing the Web while watching television 35 percent more now than they did last year. That amounts to 3.5 hours per month of simultaneous Internet and television usage, during which consumers aren’t fully conscious of anything they’re viewing.

In contrast, when watching online TV (and the ads that accompany it) consumers are relatively engaged, typically tuning in when they’ve missed an episode or when they can’t make it to their set. This higher degree of concentration translates into a more attentive – and thus more valuable – audience.

Your Competitors Are Doing It

In the past year, video ad networks have seen their video ad revenue skyrocket. Television dollars, companies say, are being transferred online, so much so that it’s been estimated the online video ad market will have grown by 48 percent by the end of 2010. Video ads now account for about 12 percent of all videos viewed online.

These marketers, the ones who are continually increasing their online video ad spend, are your competitors. You are competing against them for consumer dollars, as well as long-term customers. If your rivals are increasing their exposure through this medium, shouldn’t you be, too?

Opportunities Abound

Existing video sites like YouTube, Hulu, and, along with video ad networks like Tremor Media, YuMe, and SpotXchange offer numerous ad units and retargeting capabilities to help buyers reach their targets. New products are emerging as well. In August, online video ad service provider BrightRoll launched BrightRoll Exchange (BRX), a self-service online video ad buying platform designed to facilitate the launch of more effective, “brand-safe” campaigns. The demand has been impressive, with the company announcing last week that BRX sold more than $1 million in inventory in August alone.

There are incredible opportunities in online video ad measurement, too. Instead of struggling with how to accurately measure offline TV viewing, online video advertisers enjoy transparency with the effectiveness and performance of everything from pre-roll, mid-roll, post-roll, and overlay ads to video playing skins and companion banners.

As consumers continue to utilize online video and marketers eagerly follow their lead, video sites and ad networks will only carry on developing bold new products and refining their existing services. Incredibly, this multi-billion dollar market is still in its infancy. And it’s definitely the market to watch.

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