Majority of Agencies Plan to Shift Ad Dollars from TV to Online Video Advertising

Majority of Agencies Plan to Shift Ad Dollars from TV to Online Video Advertising

We have long discussed the possibility that TV ad dollars will eventually shift to more interactive and engaging online video advertising and it seems that this might be the year we see a major move. In the Brightroll Video Advertising Report for Q1 2011, respondents said that they would shift almost 65% of ad money from TV to online video. That's just about two-thirds. Granted, these are most likely agencies that already have a big hand in online video advertising so it's probably not such an astonishing number.

Big Dollar Shifts to Online Video Ads

More impressive might be the 80% they said they will move from display ads to online video on top of the 65% from TV. The other three categories all tied at about 25% were: Search, social media and direct response.

Add to that the fact that around 28% said they expect online video to see the largest increase in media spend, followed hotly by mobile video, 27% and then social media at 25%. Highlighting the move from more traditional and static ads, display and search were expected to grow by only 7% and 6% of respondents respectively. TV? A mere four percent thought that it would grow. So it seems that display only has about one-fifth of agencies polled confident in its staying power with 13% thinking it will just maintain status quo. If you ask me, I think it's on a downward trend that probably won't end soon as advertisers want more engagement and publishers swap out standard display for higher-value video ads.

Display Ads Are Dead, Long Live Display Ads

Does this mean the death of display ads? Probably not, again, these are most likely agencies that have a fairly big hand in online video advertising. They probably have found that display ads don't suit their clients as much as online video ads do. Additionally, there are many video ads that now fit into banner spots so why put a static image in a placement when you can probably put a more effective video ad there?

They aren't dead yet though. comScore, quite conveniently for this article, just published a report that said some 1.1 trillion display ads were shown in the US in Q1 2011 with Facebook accounting for some 346 billion of them.

Who is still putting money into them? AT&T-mobile. Of all the companies that remind me of dinosaurs, they really are one of the most prominent, almost like the T-Rex and all of us are tiny little Hadrosauruses (Hadrosauri?) running around trying not to get chewed up by them. They accounted for 1.8% with another company people don't like to deal with, Experian, just behind them at 1.5%.

Online Video vs TV Effectiveness - The Murky depths

Speaking of effectiveness, thirty-percent of respondents stated that online video advertising is more effective than TV while another 31% stated that it was as effective. The shocking number on this chart though is not the 24% who said it was less effective, but the 15% who said they did not know. This probably goes back to that lack of proper research I talked about in yesterday's article (Brightroll: Research & Reporting Key To Online Video Advertising Growth) based on the same report.

That's almost one of every seven respondents to the survey who did not know the effectiveness of online video versus TV ads. Again, I wonder how they sell those ads when they don't know. Or perhaps that group just doesn't sell all that much online video and that's the reason behind it. I might suggest they start looking into it as there are some good reports and research that has been done on that exact comparison, but we can always use more.

Majority of Agencies Plan to Shift Ad Dollars from TV to Online Video Advertising

Adoption vs. Innovation - The Tortoise and the Hare

Driving the ad dollar shift might be the large expansion of video ad format and metrics over the last year. If you think about it, user choice ,interactivity and real-time bidding all moved to the fore and many of the major video ad networks created some really interesting video ad formats with all of that. Video ads aren't just pre-roll anymore.

Metrics took a big step forward in the past year, yet the major portion of purchasing decisions are still being made on older metrics like CPM with a full 35% saying they are most likely to base purchasing decisions on that and another 12% are still using CPC. While there's nothing wrong with them there are perhaps better metrics to base upon like cost-per-engagement, which 24% are using and cost-per-video-view which another 21% prefer.

The question there is - what constitutes a video view? We have had some lively discussion about video ads being displayed at the bottom of the page, with the sound turned off and autoplay on. To me, that doesn't constitute a view, but without going and physically checking all the sites in the network it's hard to police. That's got to be the responsibility of the ad networks and perhaps we need some sort of industry-accepted certification process to eliminate this sort of video ad fraud. But that's the topic for a whole other article.

Ad units were also a major focus of innovation over the previous year as I already mentioned yet 91% of respondents still feel that pre-roll is the way to go as it performs better than in-banner video ads. The numbers don't stop there in favor of pre-roll as 67% believe it more effective and 61% say it has stronger engagement. Personally, I generally faze out while they run or do something else like flipping over to another page or to email and when my video starts, I go back to the player. Again, as I mentioned in a previous article (TITLE) that is because of the forced nature of the pre-roll and I feel that I generally have better things to do than watch an ad which I had no choice on. Again, if you give me some choice, I might feel differently. On the flip side, only 48% said that it has the ability to interact with the brand.

Finally, the majority of inventory purchasing by agencies that responded to the survey is done straight from the publisher. Fifty-two percent said that they do that while 31% said they use an ad network. Oddly, this pie chart adds up to 101%. I wonder if there's some overlap in the 2% that buy from and ad exchange and the 31% that buy from ad networks since some ad networks now have their own exchanges, for example, BRX - Brightroll's exchange.

My Take is Your Take Away

Two percent is shockingly low to me. Real-time bidding on video ad placement is one of my major trends to watch in 2011 and I think that number will jump to double digits come this time next year when Brightroll releases the Q1 2012 report. Mark my words...

Of course, the slow adoption of exchanges could in part be to them still expanding. SpotX has Otto now which auto-optimizes ad placements and I think that will also be a trend that the exchanges get into and we'll see more of this type of optimization which will offer more information and metrics to the advertisers and help them get the best out of their campaigns. That will then drive adoption of exchanges as higher ROI will start being seen.

Still, there are few standards in online video advertising metrics and this is a key point that I think the industry, as a whole needs to have an open and frank discussion about. We'll all meet up, check our egos and affiliations at the door and simply get down to the brass tacks. It's only going to benefit you all in the long run and I would be more than happy to mediate the discussion and even write up the report and help set the standards, so drop me a line. We've already done wonderful work in getting standards for the video ad units, now it's time to continue on that trend and nail down how to track it all and provide the best data possible to the clients.

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About the Author -
Christophor Rick is a freelance writer specializing in technology, new media, video games, IPTV, online video advertising and consumer electronics. His past work has included press releases, copy-writing, travel writing and journalism. He also writes novel-length and short fiction as part of Three-Faced Media . View All Posts By -

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