On Tuesday, I attended the Videonuze 2012 Online Video Advertising Summit in NYC with my colleague Jim Dicso. We are currently in the year of video – it is transforming advertising. The U.S. watched a record breaking 10 billion plus video ads this past May alone. So what is on the horizon of online video advertising? Here are the top five takeaways from the summit:
#1. Measuring ROI and ad value is still a MAJOR issue that needs to be resolved
Of course there has been a great transition of ad spending to online, but is the return on ad spend (RoAS) showing value? Director of Emerging Communications at GroupM, Michael Bologna believes, “We’re still lacking a universal measurement and to a lot of people TV content is still perceived to have a higher value over online video.” Even more so, advertisers want the online buying process to be synergetic TV buying. “Digiday data shows that advertisers would like to buy TV and online together. Unified planning is something everyone is looking for but hard to achieve,” stated Teg Grenager, Founder and VP of Product at Adap.tv. What do we expect the next step of the buying process to be, and when will it happen? Let’s throw in mobile too – it’s only a matter of time before advertisers can buy all three as a bundle package, right?
#2. Online digital video consumption is split between different screens and devices
Ed Haslam, SVP Marketing at YuMe, confirmed that consumer attention is becoming fragmented across multiple screens – further proof of the “connect consumer.” Nielsen seconded that TV reach is decreasing and the amount of time spent watching TV continues to decline. Consumers now have the opportunity to catch up on a past episode of the favorite show on seven different screens. So how does an advertiser connect on each device?
#3. Publishers are investing in original content, creating channels and new type of networks
Think Hulu’s current Summer Series and YouTube’s $100 million investment – it’s largest spending on original content so far. Since these publishers appeared on the scene 5-7 years ago, people have not stopped consuming video online. Of course original content is the natural next step for these publishers to stay relevant and to keep consumer eyes on their sites.
#4. Online video ad space is in flux between the old traditional TV world and the new online world
Even more so, these two worlds are focused on different sets of criteria to determine success. While the traditional TV ad world focuses on impressions, gross rating points, brand and reach, the online space can measure viewer engagement (i.e., ad skipping) and interactivity as well as personalization and measurable results. What do you anticipate this universal measurement tool will be, and when will it hit the industry?
#5. 90% of online video ads are repurposed TV ads!!
Says eMarketer. And while this figure dropped from 98% in 2010, it proves that advertisers still don’t understand the power of this new medium and how necessary it is to develop creative that is right for the online ad channel. eMarkteter’s online advertising Principal Analyst David Hallerman is optimistic: “More unique online creative will be created with time. It’s all about changing the habits.”
Furthermore, only 2% of the non-TV derived ads were optimized for mobile. WHAT?! Come on people! We are in a multi-screen world (as stated above): consumption is split between multiple screens and devices, and pretty soon advertisers will be making all of their media buys together. TV, online and mobile, unite!