October 08, 2014

Online Video vs TV: Some Facts

Despite all the bullshit you hear about TV dying and online video taking over, in the first quarter of this year Nielsen reported that 96% of video viewing was done on a TV and 4% was done on line.

But another interesting question is, to what extent is the impressive growth of online video ad sales hurting TV ad sales?

According to a very interesting piece in Media Life recently, the answer is, not much at all.

The piece in question is an interview with a guy named Brian Wieser who is senior research analyst at Pivotal Research Group. Wieser makes the following points:
  • Most advertising dollars for online video are coming out of other online ad budgets, not TV ad budgets.
  • Much of the advertising dollars spent on online video ads are going to the same companies as TV advertising -- the big companies who produce the programming whether viewed on line or on TV.
  • "Video is the new premium display as it is viewed as a more favorable form of advertising vs. banner ads." Which is exactly what we predicted here at the beginning of the year.
  • One of the astounding facts about online video that I had never seen before: 17% of the population is responsible for 96% of all online video viewing.
Even online advertising evangelists are now starting to admit that, despite its dramatic dollar growth, banner advertising has been a huge disappointment.

My guess is that the potential sales volume for online video ads will have a lot to do with Facebook, and eventually Google. If Facebook and Google users will accept video ads, there will be a landslide. But if video ads become a big annoyance, and users start opting out, there will be blood.

Meanwhile, marketers will continue to dump money into online video ads regardless of the fraud, scams, and lack of reliable data. What's the alternative? Banners?

Big thanks to Steve Goldstein for turning me on to the article.


Cecil B. DeMille said...

Sad that online video ads have a better reputation than banner ads. I wonder if that's because people have simply learned to completely ignore banner ads? Or maybe they just use AdBlocker. Online video is roughly the only advertising I see online anymore. Whether that's thanks to software or being jaded is my little secret.

malbarda said...

Dear Ad Contrarian: for a contrarian view (or perhaps, complimentary view) have a look at these two articles. Yes, they're mine... sorry, but hopefully you'll agree that it is relevant to the discussion. Also, in full disclosure, I have been part of Pivotal's investor events.