Last post we talked about online video migrating increasingly to a professional format, although there will be a significant but much smaller percentage of user-generated video than in the past.
With that in mind, it's important to look at how advertisers are responding to the changing reality.
Over the next couple years, we'll see the online professional video ad market look more like its offline counterpart: TV.
A number of video content providers have already went that way, with more joining them as they enter deeper into the market.
Abcnews.com has been there since early 2007, while other professional video sites like Video Egg and Heavy.com are already following the impression-based ad model as well. Msnbc.com has announced it will also be moving toward that ad model next month. That will coincide with the introduction of their new video player in December.
Jeff Ratner, managing partner and digital director at MindShare Interaction, said concerning these changes, “A lot of it is being driven by the networks coming into the space. I think you are going to have pay-for-performance models as well. Right now it’s essentially based on viewership.”
The former strategy of a flat-fee approach doesn't make as much sense when many more viewers are watching online video. That's obviously happening, which is the key motivator behind the change.
Video Egg Ceo, Matt Sanchez, says that the impression-based TV model will serve as the foundation for the online video ad model. “It seems like that is what media buyers are looking for today. We started out on a [cost-per-thousand-viewers] basis. For us, we were trying to make it sort of simple for advertisers to understand—that seemed to make the most sense.”
Online video ad spend is projected to grow significantly over the next five years, projected to reach up to $7.1 billion by 2012 by Forrester Research.
Comment Preview