Brands coy on online video

Feature

16 December 2011

Online video now reaches 182 million consumers in the US, with the greatest proportion of viewers aged 25-44. In September, viewers watched an average 19.5 hours online video per person per month, up from 14.5 hours in January. Although this level is still low compared with traditional television viewing – 146 hours and 20 minutes a month – time spent with video is growing dramatically.

The market is split between full episodes or films on services such as Hulu, and shorter films on platforms such as YouTube, Vevo, 5min.com, as well as user-generated content. Traditional TV networks offer recent episodes on their websites. Most networks also provide programming on Hulu within a week of the air date.

CONSUMER APPEAL
In September this year, video ads accounted for 14.7% of all videos viewed but just 1.4% of minutes spent viewing video online. That’s part of the consumer appeal – on TV, ad breaks make up 25% of broadcast time.

The growth story is similar for mobile video. Nielsen expects 158 million mobile users to be watching film on their phones by the end of 2015. Other devices expanding the online video universe include connected TVs, games consoles and set-top boxes. This is a key growth area in the US and in Europe.

However, ad revenue in the online video space remains a fraction of the $71.5bn traded in TV, although it is growing rapidly, according to Kantar Media. In 2011, eMarketer expects online video adspend to hit $2.2bn, rising to $7.1bn in 2015. Most major advertisers are leveraging online video advertising, but not to its full capability. The challenge is to pull in performance and direct-response advertisers.

Both groups will have to move quickly in 2012. The London Olympics will coincide with what is likely to be the highest-spending US presidential and congressional political year ever. Traditional TV will struggle to meet demand, so advertisers will need to find alternative ways to meet their goals. Video is a logical place to look.