TV Includes 25% Ads; Online Long-Form Video 8%

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Research from Ooyala suggests that there is potential for publishers to increase their video ad loads, and a new study released in June 2012 by comScore shows that, indeed, online video lags traditional TV in ad loads by a considerable amount. According to the report, content accounts for 75.2% of TV programming, with ads accounting for the remaining 24.8%. Within the online video space, though, ads accounted for just 1.5% of overall viewing time in March 2012. And although online video ad loads were slightly stronger for long-form premium TV content, with ads representing 7.9% of all minutes, they still paled in comparison to traditional TV ad loads.

Video Viewing Growth Outpaces Ad Spend Growth

Data from “Surviving the Upfronts in a Cross-Media World” indicates that despite a recent uptick, online video ad spending has not grown at the same rate as video viewing. Delving into the significant increases in online viewer engagement, the report reveals that the average number of daily unique viewers has grown 30% year-over-year, the number of videos per viewer has increased 20%, the monthly hours spent watching online video per viewer has jumped 47%, and the average time spent watching a video has grown 23%.

Video Ads Said Just as Effective as TV Ads

The report identifies “advertising myths,” using several metrics to test their accuracy. The first “myth” tested is that video ads in short-form online are not as effective as TV. Using its Share of Choice metric, which measures consumer preference for a brand following exposure to an ad, comScore found that the correlation between the lift in Share of Choice following exposure to pre-roll advertising in short-form online content and the lift in Share of Choice following exposure to advertising on TV is 0.86. This indicates that creative messaging works similarly across both platforms, and that video ads can be as effective as TV ads.

Offline Sales Lift Also Comparable

The study also analyzed lift in CPG brand sales in retail stores after exposure to TV ads for one year, comparing it to lift in sales following exposure to online ads (including banner and rich media in addition to video) over the course of 3 months. The results showed that the short-term offline lift in CPG brand sales from exposure to 3 months of online ads matched that of the year-long exposure to TV ads, at 8%.

Other Findings:

• Looking at a campaign case example, the report finds that TV advertising reaches a point of diminishing returns, and begins to become increasingly expensive to build incremental reach. Trying to reach a target audience through TV advertising alone means that a brand will encounter this plateau where more dollars only increases frequency of exposure rather than incremental reach. In a simulation using comScore’s cross-media databases, the report shows that using online video can be an effective way to build reach. In the example provided, allocating 100% of the budget to TV resulted in effective reach (4+ exposures) of 67.8%. Allocating 90% of the budget to TV and the remainder to a digital component increased the effective reach by 15.9% points, to 83.7%.
• Adding digital to a TV plan can also increase impact. Consumers exposed to an ad on TV and an ad online were 28% more likely to visit the brand’s website than those only exposed to the TV ad.
• Consumers aged 12-34 and 18-34 are twice as likely to have received an online impression compared to other demographic segments that received impressions. However, these segments receive TV impressions only in proportion to their population.
• For the 25-34-year-old and 35-44-year-old demographics, there is almost no difference between online video’s reach among the online population, and the US population overall.
• The report suggests that brands consider tweaking ads they have created for TV rather than create new commercials for digital. The main strategy recommended is to use shorter-form ads, defined as 15 seconds or less by cutting down the 30-60 second TV spot to that length. The main ways in which to do so are to: reduce communication to a single idea; use images and pictures instead of words; include 5 seconds of product shorts; and avoid storyline formats.-MarketingCharts
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