Online Video Ad Market Gaining Attention and Budget Allocations

Until now, the video ad market has been small compared to TV. But that imbalance may not last for long. As more viewers turn to online video, marketers have an opportunity to reach core audiences through this format and comScore analysts are predicting a big shift.

Part of advertiser reluctance to move their ad budgets to online video is based on a number of myths which comScore seeks to dispel. They offer the following truths of video advertising in their Surviving the Upfront in a Cross-​Media World study.

  • Video is effective both online and on TV
  • Marketers should allocate budgets to online and TV to improve reach and effectiveness
  • Adding online to TV increases campaign impact
  • Adding online marketing helps advertisers connect with the non-​TV audience

In the past year, the growth of online video viewing has exploded as these numbers from comScore show:

  •  Average daily unique viewers: 105 million (+30%)
  • Average videos per viewer per month: 204 (+20%)
  • Hours spent per viewer per month: 21.7 (+21.75)
  • Minutes per video:  6.4 (+23%)

While the average TV hour is comprised of 75.2% content and 24.9% ads, the picture is much different for online video: 98.5% content and 1.5% ads.

Marketers can roll out their video ads on a number of properties but to reach a large audience, they’ll want to know who has the traffic. On a monthly basis, these sites are where consumers watch the most video:

  • YouTube 146 million
  • Yahoo 61 million
  • Vevo 51 million
  • Facebook 45 million
  • Viacom 45 million

In preparing ads for the online video platform, marketers should make a concerted effort to connect with Millennials. This group shows the most willingness to watch online ads and report being influenced by them. Because of the short format, a TV ad spot should be reduced to 15 second for online video. The ‘lean-​forward’ visual environment of online video means marketers should limit screen text and focus on product shots instead.

As more marketers gain expertise with the format, a higher percentage of ad dollars will be allocated to the video ad channel.

[Source: Surviving the Upfronts in a Cross-​Media World. comScore​.com. 2012. Web. 2 Jul. 2012] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.