A Dose of Bad News for Online Video Advertising

A Dose of Bad News for Online Video Advertising

It's tough following this space sometimes because you'll hear how "online advertising is projected to reach this amazing such-and-such billion dollars by 2017" or something similar.  On the other hand, I've been seeing, for awhile now, many articles talking about the bad: that the projections are way off and should be lower, that online video advertising dollars are not an addition to, but a piece of, TV advertising dollars.  And when I saw this Tubefilter article from yesterday saying that 80-85 percent of skippable ads are skipped, and this one from paidContent that talks about TV ad dollars slow to move online, maybe the enthusiasm from our end doesn't match the reality.

What to Believe About Online Advertising Dollars?

It seems like everything is like this: you have the tremendous over-enthusiasm, and then the opposite pessimism...the truth is probably in the middle somewhere.

But, what about that paidContent article?  The main crux of it is that advertisers don't want to add to the budget in order to go online more, and they are "stubbornly" sticking with TV.  And one of the big problems, still, is an agreement on how effective online ads are.

One source might say, "Online video to soar to $5.9 billion by 2017!" and that sounds like a great thing, but in the paidContent article, we are reminded that TV is projected to have some $81.6 billion by then.  Maybe it's good and bad.  I'm not sure anyone can tell anymore.  One thing I've always said is that people seem to be expecting online video to shoot up way too fast and are being unreasonable when it comes to its growth.  People expecting online video to lead to massive cord-cutting to the destruction of TV, or thinking that the money coming in is going to surpass TV anytime soon, have always been much too optimistic when it comes to this space.

I'll always remind that TV has been around for decades, while online video has only really shot up to the big time in the past few years, so expecting video to be TV's equal anytime soon is faulty.

A Dose of Bad News for Online Video Advertising

But perhaps the more alarming, but not necessarily surprising, aspects of the bad news I've run across is the Tubefilter article talking about skippable ads.  At the VideoNuze Summit in New York, Tubemogul's CEO Brett Wilson informed everyone that skippable ads are watched 15-25 percent to completion.  This is obviously a far cry from what we were told when TrueView ads were being introduced, when we were told only 10 percent of people skipped these things.  That always sounded incorrect, because from my own personal experience with skippable ads...well, I just want to watch the video that I came here to see.

A conclusion is made in the article where YouTube's Kathryn Friedrich and Tubemogul's Wilson said that making ads engaging as possible will correct that figure.  Maybe...but you've got 5 seconds to be truly engaging, make people completely forget about the video they came to watch, and watch the ad instead.

What do you think?  Are online video projections too optimistic, or are people expecting too much of them?  Is there faulty logic always comparing it to TV and not expecting reasonable growth year to year?  I'd like to hear from the community on this one.  What is the pulse of online video ads?

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Posted in Video Advertising
About the Author -
Chris Atkinson joined ReelSEO in 2011. He is a longtime film and television reviewer, and has almost two decades of experience in the theater industry. He also writes on his personal blog - http://nymoviereviews.com. View All Posts By -

What do you think? ▼
  • Woody Sanford

    I believe it will come down to "hooking" viewers in the first 5 seconds. If I see something in a new well done car commercial I at least see half of it but when the familiar format of an "Explainer" video pops up I've hit the skip button 4-5 times before it allows me to. I also believe that in this instance it is desensitising people to certain formats of marketing video like the "Explaner" and making it less valuable.

  • cjbruce

    I think we need different types of advertising. Using the same ad format as TV on a completely different medium doesn't work. It's not a linear experience, you choose what to watch and should also have some choice in how you interact with a sponsor. More dynamic and integrated advertising could solve the issue. Also, stop serving me ads for stuff that I already own or subscribe to.

  • Oscar Jesurum

    The current advertisement system is probably invasive, as we are expecting a user of video on demand to watch a second video that is not. Regular TV has moved to a different viewer experience since the introduction of digital recorders on cable set top boxes. Technology has been educating people to skip ads for the last 7 years. I think that the strenght in new media advertisement is the power to enhance segmentation; to advertise products directly to their consumers. So the solution IMHO is to take a better advantage of social profiles and be more strategic upon targeting decisions. A set of new or better tools to reach the right audience is a must.

    Last but not least is the necessary trial and error adjustments with the use of traffic stats to learn when a viewer skips your ad. Those first 5 seconds work as a hook, and innovating in scriptwriting could avoid the genre-identification, no matter if it is an explainer video, infomercial or channel promotion.

  • http://www.facebook.com/dimitrios.papagiannis Dimitrios Papagiannis

    I always start out my videos with "will this kitten live or die"stay tuned.