Cast your eyes upward and behold the glory of long-form content and its ad viewing might! FreeWheel reported in the Q4 2013 Video Monetization Report that long-form content ad viewing blasted into the stratosphere with massive growth last year. What's that mean? Well, two things really. First, viewing of online long-form video content is growing. Second, there are a whole lot of ads on that online long-form content, I blame Hulu, but let's see what FreeWheel has to say on it.
Is 86% a lot of growth year-to-year? When compared to short-form ad viewing growth of 22% and mid-form ad viewing growth of just 13%, the answer is obviously yes, yes it is a lot of growth. Overall year-to-year there was a 30% growth in ad views and a 31% growth in video views. Dangerously close to even there and hopefully the prior will never surpass the latter because that would mean the rate of ad viewing grew more than video viewing, or in other words, ad loads increased more than people viewed videos, or in other words, the industry overloaded content with ads, maybe.
Some important stuff in regards to FreeWheel's research methodology:
- Short-form (0-5 min) – video clips, music videos, made-for-web content
- Mid-form (5-20 min) – web series, extended clips, interviews
- Long-form (20+ min) – linear TV shows, live streams, feature films, sporting events
The dataset used for this report is one of the largest available on the usage and monetization of professional, rights managed video content, and comprised over 75 billion video views and 60 billion video ad views in 2013.
As part of this analysis, we grouped publishers into two categories:
- Programmers / Multichannel Video Programming Distributor (MVPDs):
- Generate majority of their advertising revenue from linear TV services
- Offer diverse content mix on IP-based environments
- Digital Pure-Plays:
- Generate majority of revenue from IP-based environments
- Aggregate third-party content and/or are developing original content
So when they say that they have the numbers on hand, they really do. Their platform tracked 5 billion video ad views per month and over 6 billion video views per month in 2013. So yeah, they have a pretty good read on the industry and that's why I like analyzing their stuff. Plus, they put out a pretty good report format and set of numbers.
Video Ads vs. Content Length
FreeWheel points out in the report that mid-length content, which had 13% ad viewing growth, really was a rising star at the end of 2013. But you have to look at Q3 2013 to see it, because in that quarter it all but fell flat with just 1% ad viewing growth year-to-year. So the holiday season seems to be ripe with content in the mid-form area. Perhaps due to a boatload of content for the Christmas movie premieres or perhaps because of a long list of seasonal special content that was published.
Not at all surprising is the fact that the majority of that long-form ad viewing came from the MVPDs, the cable companies and television broadcasters who have finally come to the realization that TV Everywhere doesn't actually require a television and that there are millions who want to watch their TV anywhere and at any time and are even willing to be interrupted by commercials, just like on regular TV, to get it. Also not surprising is that the ad viewing growth on long form is extremely small on digital pure-plays (the YouTubes, Vimeos, DailyMotions of the world) while the vast majority of the short-form ad view growth is there.
The fact that more ad view growth for mid-form occurred on MVPDs shows that they are really starting to "get" it. They're starting to use mid-form content most likely as a driver of more views of long-form content and they're learning how to better monetize that mid-form content through ad placement like they already do on the long-form content, which they clearly are doing a whole lot more of online. At least, that's what I'm extrapolating from the numbers.
What the Content is, Matters, a Lot
This is one of the more interesting and unique breakdowns of online video monetization. We often see things about monetization versus content length or video ad length etc. But we don't often get to see what kind of content is getting the ad view growth. FreeWheel draws a correlation between TV and online due to the fact that there was large growth, over 50% year-to-year, in three major categories of content and those categories, Documentary/Reality, Scripted Drama and Sports, account for Nielsen's top five rated primetime programs in 2013. They all also saw some double-digit growth in terms of share of ad views overall accounting for over 50% of all ad views.
The fact that eight categories of content all saw double digit ad view growth is astounding as well. The next four categories, music/clips, Spanish language, Comedy/Variety and News pull in 41% of ad views and had ad view growth of 24-42%.
As expected, those categories also dominate the long-form ad view chart.
The categories here are slightly different than above, but Scripted Drama took home a major portion of the ad views. Here the category is live sports, which makes me curious as to how much ad view share is going to pre-recorded sports. The same question applies to live news versus pre-recorded news in my mind.
The break out of live content is important though because it had a fairly sizable ad view growth year-to-year and hit almost 10% of overall ad view share in Q4 2013.
Go To Device, is Device To Go?
We can't talk about TV everywhere and long-form online content without talking about device because the device shift has caused a monumental shift in how and where we watch content. Earlier this year I said that mobile was going to be the biggest driver of video viewing growth in 2014. It seems that it was also a major driver in 2013 which is no surprise. Tablets and smartphones are now at the point where many can afford them or already have them and the screens are big and bright and lend themselves well to single person viewing of content, including long-form content. So to see the rise in video and ad viewing on the devices is not at all surprising to me.
Mobile devices accounted for 34% of ad viewing on long-form in the quarter, and 17% of all ad views with 178% year-to-year growth for smartphones and 136% for tablets. All of that amounts to a trend that is going to continue large growth spurts and continuing eroding the desktop's dominance in terms of ad viewing and long-form video views.
Ad Completion Rates Remain High
Offered as evidence that people aren't abandoning long-form content even with increased ad breaks (3.2 in Q4 2013 vs. 2.8 in Q4 2012) are completion rates in the 90th percentile for long-form, outstripping mid-form by almost 10% and short-form by 15%. Of course, the majority of that long-form content is probably from TV, which is built around the ad-supported model, so shifting the device doesn't really shift the perception of that's how it's done. That means that long-form viewers are most likely already in a mindset of accepting mid-rolls. FreeWheel states they are more dedicated to the long-form content and so abandon less when mid-rolls show up and that's probably a factor as well in the high completion rates for the ads.
In a nutshell, online video is inching closer and closer to a more TV-like landscape in terms of long-form content which is to be expected given the growing popularity of TV Everywhere (even though many consumers still seem oblivious to the term and its implications on their TV content viewing).
An interesting bit of research that could be done could look at whether or not short and mid-form content is gaining a foothold on TV. I do know of some kid's content in that range (Teen Titans Go for example) so I don't see why it couldn't be utilized even further. After all, if video viewers are watching a lot of these formats online, it's entirely possible that they would do so on TV as well, and, from a business standpoint, they could also potentially be monetized with ads.
The full report can be downloaded here.