Forget Year of Mobile, It’s Actually the Year of Video
May 20, 2013
(an edited version appeared on Ad Age 5/17/13…)
I admit I’m a geek and so was excited to sneak a peek at FOX’s Almost Heaven that played a starring role in Monday’s FOX Upfront presentation, and I was just a little curious with the latest exploits of Nicole Richie in AOL’s unscripted #CandidlyNicole launching at the Digital NewFronts earlier this month. What is clear is that coming up this season, viewers can look forward to an abundance of programming, while advertisers will see immense competition for a share of ad budgets.
As much as we all talked about 2013, finally being the Year of Mobile, I’m convinced that it actually is going to be the Year of Video. Here’s why:
More viewing on video, with more time spent on more devices.
Too much is made of falling Network prime time ratings. According to our estimates at GroupM, overall video consumption is up year on year by about 3.7%, assisted by viewing of streaming video on PC’s, connected TV’s and mobile devices. According to the latest comScore, 183 million Americans on average view 215 videos each month online. Mobile’s big boost is also being driven by video, with Cisco forecasting that by 2016, two thirds of mobile traffic will be viewing video.
Dynamic content is growing audiences.
This past year, the rules are being re-written on the back of strong original programming investment. Cable network AMC’s Walking Dead was the second highest rating show on prime time television, beating out top Network shows such as FOX’s American Idol and ABC’s Modern Family in straight 18-49 ratings. Netflix’s House of Cards purportedly pulled in 2.7 million viewers in its first 12 days which is about the same as what premium cable network Showtime’s pilot of Homeland achieved in live and on-demand viewing when it launched in 2011.
Live Television remains a powerful medium.
However, before you write off Network TV, live viewing remains a powerhouse that advertisers still want. Despite 44% home penetration of DVRs, 50% of households now accessing video on demand and 5 million Americans having cut their cable cord; 85% of video viewing is still live television. Live sports, live news and must see television, such as the season finale coming up this week on ABC’s Scandal or NBC’s The Voice are not just good for ratings, but deliver higher attention to the commercials, and boosted by more social media engagement.
Video storytelling continues to be a persuasive brand medium.
When it comes to branding, video continues to be a powerful choice for advertisers. Brand tracker studies and media mix models I’ve seen over the years consistently prove Television to be the most readable in driving results both in terms of brand recall and sales. We know TV ads are not just interruptive, but they are also engaging. On top of the 100 million plus viewers that a TV spot in the Super Bowl reaches, the ads in the 2012 Super Bowl were viewed an additional 400 million times online. Additionally, there are healthy levels of attention, with online video ads typically achieving a viewed completion rates of 87%.
Video is CPM gold.
For publishers, CPMs for video are typically 3-4 times display CPMs which is why the AOL, Yahoo!, YouTube, but also the likes of Vevo and Blip investing in original video content. So too are the print brands. CondeNast and Wired venturing into their own video channels. The advertising potential appears promising. Ads are now appearing in 25% of online videos, roughly double the percentage versus just two years ago. Yet, this increased ad load doesn’t appear to have deterred online video viewership which continues to rise. On the television side, National Broadcast is still able to sustain premium CPMs. While the top Cable Networks continue to eye those premiums as the potential for upside.
However, the industry needs to up its game to utilize video’s full potential.
The media are changing the game on video. But are we evolving to meet those opportunities?
- Video content is being consumed in multiple different contexts and devices. Whether it’s live event television, catch up viewing on-demand, niche viewing on mobile, binge viewing via Hulu or user generated video. Are we thinking strategically as to the types of ad content forms we are placing in those different environments that best optimize the brand experience?
- According to Bright Roll, Inc. only 10-15% of online video ads are interactive. The rest run variations of ordinary TV spots. Are we underutilizing the opportunity to be more immersive?
- Some level of Addressable Television either by individual household or zip code level in 60 million homes is increasing how we can make television advertising to be more relevant to audience
- Drilling and responding to user data provides further abilities to not just be more targeted but more efficient in our communications.; and
- With so many alternatives, delivering a more effective video strategy needs multiple content solutions. To achieve this effectively, we need to develop and deploy more cost efficient ways to produce advertising video content.
The future for video is bright. As to are those brands and agencies that choose to exploit the full capabilities of video.