Some new data from video ad network BrightRoll suggests that Web video advertising is suffering along with every other category BrightRoll places video ads on top media and professional broadcast TV sites rather than user-generated video. In other words, this is the inventory that all the advertisers want, but there supposedly isn’t enough of it. Yet 50 percent of this “broadcast quality” video inventory goes unsold.
Amd while more advertising dollars keep pouring into this segment of Web video (BrightRoll claims its revenues grew 172 percent annually in the fourth quarter of 2008, up 12 percent sequentially from the third quarter—although it gives no absolute numbers), the rates advertisers are willing to pay keep coming down.
In the fourth quarter, across BrightRoll’s network ad rates for pre-roll ads were down 25 percent compared to the year before. It could have been worse. In comparison, remnant display ad rates were down 50 percent in the quarter.
For all of 2008, pre-roll CPMs were down 14 percent, and they were down 12.5 percent sequentially for the quarter.
Those awful pre-roll ads look like they are here to stay. BrightRoll reports that 83 percent of a typical video-ad campaign was made up of pre-roll ads, versus only 63 percent in the fourth quarter of 2007. BrightRoll CEO Tod Sacerdoti says this is because pre-rolls outperform other types of video ads in all the relevant measures: “duration viewed, click through rate, cost per view, brand lift and change in purchase intent.” BrightRoll served 620 million video ads during the fourth quarter.
I guess this was not any surprise, was it?
It’s too bad that the online video advertising industry is so stuck thinking that the only way to monetize video online is through pre- and post-roll ads ported over from TV. There are video ad companies growing like crazy (like the company I work at, TurnHere) producing sponsored/branded web video advertising that isn’t an interuptive pre-roll ad. It’s content that is useful and relevant to the user, clearly marked as sponsored and drives action, yet more than 80% of people that click on these ads watch them to the end.
I believe that as soon as media companies stop trying to treat online video advertising like TV advertising and think about how video works with in online medium we’ll start to see video advertising fulfill its long-awaited promise.
Although I don’t mind reading this as it proofs our model (www.mig69.com/images/web/sample-case.png) it’s no suprise! Everybody knows what happened with the banner industry!
Techcrunch: please have an editor read your blogs before posting them (e.g., spelling, punctuation, etc.).
I guess this only shows that online video advertising could be also in the downhill.