Streaming Media - 2008 Industry Sourcebook - (Page 46) industry update streaming on AOL, agreed in another reminder of the TV networks’ continued efforts to leverage the web. “This is definitely something that’s here to stay,” said Cheng. Some of the television networks are attempting to use interstitials— video ads inserted into the middle of other video content, much like TV ads that are inserted into the middle of programming—as they move their most popular programs to the web. NBC’s use of interstitials during online episodes of The Office—posted online 1 day after the original TV run—is about 1.5 times the number of interstitial breaks as run during the television broadcast. While this might be acceptable, the fact that the two ads shown are from a primary and a secondary sponsor makes the repetition of the ads seem laborious. Also, as with any newer technology, sometimes the ads don’t always go away in the time that the countdown timer on each ad promises. Sometimes the ads play in multiple sequences back to back, as I found recently when I opted to skip ahead to a chapter late in the program. Since I had passed four interstitial breaks, I was subjected to the eight ads I had missed, which meant watching the same two ads four times each. NBC NBC pushed the use of interstitial video ads to the limit during web delivery of The Office, which featured 1.5 times the number of breaks as did the TV broadcast. Market Projections While the technologies continue to be refined, trends show that online video and video advertising will continue to grow in 2008. Back in 2004, only 2.2% of the $9.5 billion online advertising space was spent on video advertising, but a report released by eMarketer noted that online video ads continued to grow in 2007. 2007 online video advertising grew 89% from 2006 to top $775 million. “More significantly,” the report notes, “the growth rate will remain near or above 40% through 2011, when video ad spending will reach $4.3 billion.” eMarketer also notes that the figure for streaming video alone is expected to rise to $1.3 billion in 2008 and top $2 billion in 2009. As with all analyst projections on market sizes, there are those who dispute these numbers. While some of the projection disparities can be chalked up to measurement differences, the scale and scope of projections is vastly different. For instance, at year’s end, Forrester Research predicted that online video advertising is set to top $7 billion in 2012. “Online video advertising is the fastest-growing category of online advertising,” said James McQuivey of Forrester Research, “and at $7 billion in 2012, it’ll be one-tenth of the whole television advertising pie.” As the eMarketer report shows, the world of rich media advertising goes well beyond the boundaries of video ads tied to video content. In fact, a large growth area continues to be the use of video in a banner ad. Most auto-play video ads embedded in a banner now default to no sound (in other words, they begin to play with the sound off, but they have easily accessible video and audio controls also embedded in the banner ad). These controls are often Flash-based, but a few Silverlight-based ones are also popping up on the web. In some instances, a video ad also converts to a banner ad after the video content is shown. Online Ad Types and Placements These types of ads generate significant click-throughs and replays, even if only to hear what was being said during the ad. DoubleClick released a report in early 2007 that strengthens the eMarketer report and also shows why advertisers continue to show interest in online video advertisements, using aggregated campaign performance metrics of online video ad placements from more than 300 campaigns for 130 advertisers. Rick E. Bruner, research director, and Jai Singh, research manager, noted DoubleClick’s findings that “users click the video Play button more than they click on image ads, generating about three times the replay rate versus image ads.” They also found that clickthrough rates are far higher than image format ads because users click on video ads about five times as often as they do on image ads (up to about 8% of total ads served). The report also noted that size doesn’t necessarily matter, as “play-through rates do not vary greatly by expandable or standard video ad formats,” but that all video ads, on average, play two-thirds of the way through before a user clicks on to another page or clicks through to see the product or service being advertised. The report can be found at www.doubleclick.com/insight/pdfs/dc_videobenchmarks_0702.pdf. Disney-ABC Disney-ABC Television Group recently inked a deal to distribute programs such as Ugly Betty via streaming on AOL in addition to on the ABC.com site. 46 STREAMING MEDIA INDUSTRY SOURCEBOOK 2008 http://ABC.com http://ABC.com http://www.doubleclick.com/insight/pdfs/dc_videobenchmarks_0702.pdf
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