matt - Sunday, April 5th, 2009
Liz Gannes at NewTeeVee recently posted about an IAB report on 2008 Q4 Internet Advertising Revenues. For brevity’s sake, I’ve included the 2008 chart from the IAB report (pdf) here:
Bottom line – digital video commercials brought in $734 million up from $234 million in 2007. Why is this important? Well, because of the explosion in consumption of video content online (UGC & Professional), this market for Digital Video Ad content will increase. Take into consideration we’re at the very infant stages of monetized Online Video content on Hulu, YouTube, ABC.com and other Online Video content portals. And this is just taking into consideration the minimal ads that are currently placed on most Online Video content. Do people really view their favorite TV shows online though?
Take a recent scenario I encountered. I’ve watched 24 all season and for some random reason my DVR didn’t record the previous week’s episode. Anybody knows with 24, you’re either all in or you’re out. So realizing that Time Warner didn’t offer an OnDemand option to watch the missed episode, I was faced with 3 options:
- Spend $1.99 to purchase the episode on iTunes
- Watch the episode with limited digital video commercials on Hulu
- Go to a torrent site and download the episode for free (with a digital five finger discount)
The quickest, cheapest and legal way was Option #2. I streamed the content from Hulu via my Xbox to my TV (note – PlayOn software made this possible and we recently covered it here). At each ‘commercial’ break there was literally one 15 second digital video ad. That’s it. If anything, this definitely made for a pleasurable viewing experience but also showed how much more room there is for creative uses of Digital Video Ad content online. I was already bracing myself for the habitual 2 minutes worth of re-purposed broadcast commercials so the 15 seconds worth of commercials (specific to internet companies) was a surprise. And I’m not alone in viewing video content online as a recent LRG study showed that of the 18-34 demographic, 42% report that they watch video online at home at least weekly – up from 28% last year.
However, digital video ads will need to evolve into interactive video ads to set the stage for explosive growth. Why Interactive Video Ads? Studies showing that demographics sets like Gen Y are expecting social features and interactivity with their TV viewing experience are becoming more common as viewers consume more video content online. Interactive videos ads can allow for a transformation to a more engaging and seamless experience for the consumer. How these interactive video ads are integrated into the online viewing experience will determine their ultimate success.
What constitutes an Interactive Video Ad? Well I would argue it’s not just content with a URL plastered on it. This is what re-purposed broadcast content is already doing. No, the Interactive Video Ads of the future will need to allow for a more ‘enhanced’ experience for the viewer. This can run the gamut from integrated social video experiences like Harper’s Island to more simple community / social based components like trivia / polls used in the Interactive Video Ads themselves. And of course you have interactive product placement. Any way you slice and dice it, Interactive Video Ads are the future for a jacked in generation and will set the stage for growth in the Digital Video Advertising category.
