eMarketer recently published an article titled The Online Video Advertising Picture Clears Up which forecasts that online video advertising will represent 4.3% of online spend and 1.6% of television advertising spend this year, growing to 11% and 5.5% respectively by 2013. While these figures seem small, to achieve them requires 30% to 40% annual growth, which will be challenging given the current advertising climate.
An interesting statistic in favor of online video is the advertising spend per hour of video watched: for 2009, eMarketer forecasts this as $0.17 for online vs. $0.13 for TV. With US online video penetration at 84%, the key ingredient to growing advertising revenue is through scaling engagement and maximizing the impact $0.17 per hour of video consumed has on market development. Using the online video growth rates from the eMarketer article and holding audience penetration constant, this requires monthly video consumption per viewer to grow from just over 200 minutes today to almost 1,200 minutes per month in 2013. To put this in perspective, the average television viewer watches over 9,000 minutes of TV programming per month today.
While achieving online engagement/consumption growth of this scale is achievable, it is not going to be done by providing the same consumption experience online as offline. The key drivers for encouraging online video consumption are availability of unique premium content, and a differentiated online video experience.
Premium content is critical for advertising dollars as marketers are still shying away from user generated content. While sites like Hulu are experiencing strong audience growth, there are too many alternatives to consuming made-for-TV content online in the form of DVRs, iTunes Season Passes and DVD rentals. Addressing the scarcity of premium online-only content through initiatives such as IAC’s announcement to team with Ben Silverman to start an online entertainment production company, will help drive online consumption; however, the high costs of producing quality content make the success of this approach far from certain.
In the short term, media companies need to focus on driving more consumption and engagement around multiplatform content. Online publishers still have a long way to go drive the discoverability of content through universal/onebox search, contextual inclusion of video on topic and article pages and video SEO. However, these challenges are understood and technology is available to assist with meeting these goals.
What’s missing is a compelling reason for consumers to go online to specifically watch video content that is also available on television. This can be addressed through delivering a more interactive, lean-forward consumption experience. Improving upon the current video model is not that complicated. By tapping into video metadata, web content management platforms and databases, and third party API’s, online video can become a more useful medium. For example, while consuming business media from a site like CNBC or Reuters, stock quotes and company headlines could be presented at the exact moment that a company name or CEO is mentioned. For sports, player stats, team schedules, and other relevant information can be incorporated into the user experience when players, teams and topics are mentioned.
These concepts are not really new—a lot of this overlays is what media companies such as CNBC and FOX Sports have been doing all along through their cable broadcast. The power of introducing these concepts online is that it creates a more interactive experience than television can possibly offer; I can pause the video to research a specific topic in depth before resuming the video, enabling me to consume information or be entertained on my terms, which, after all, is a core value proposition of online media.
Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.