Video Essentials

Two Ways to Make Money from Online Video in 2012


Sites that offer online video are poised to grow their revenues in 2012 and beyond, as online viewing becomes a regular part of many people’s lives. Speaking at the Beet.TV Executive Retreat in Vieques, Puerto Rico, Eli Goodman, a media evangelist for online measurement company comScore, pointed out two significant untapped growth areas.

More Ads

About 15 percent of all videos viewed online are ads, notes Goodman, but that doesn’t mean that we spend 15 percent of our viewing time watching ads. Actually, less than one percent of online viewing time is spent watching video ads.

Compare that with television: viewers watching live TV — or viewers who don’t use a DVR to skip over ads — see 15 minutes of commercials for every hour of programming. It’s an amount people are comfortable with, says Goodman; viewers will tolerate that ad load.

There’s a huge gulf, then, between the 1 percent of ad viewing time online and the 25 percent on television. That’s where the opportunity is.

“There’s a lot more room, I believe, and certainly we as an organization believe, for video ad load to be able to go up,” says Goodman.

Brand Advertising

The second opportunity exists in the disparity between direct response advertising and brand advertising. Direct response advertising is when the advertiser wants the viewer to respond immediately, as with an infomercial. Brand advertising is when a company wants to influence perception of their brand, product, or service.

All advertising is currently a $200 billion market, says Goodman, and two-thirds of that is brand advertising, with only one-third direct response. The numbers change, however, with online video ads, where direct response is three-quarters of the market.

That shows huge growth potential for online video brand advertising, says Goodman. Online video offers the same experience as TV, with viewers forming an emotional response to what they’re seeing. That will only increase as more premium content goes online. Advertisers, then, are likely to get the same brand benefits from online video advertising.

One pitfall that Goodman sees is advertisers reusing TV commercials online. He believes they should create web-specific ads that create an emotional connection with the viewer. “It doesn’t necessarily work in the same environment,” says Goodman of TV commercials.

To view the entire Beet.TV video, scroll down.




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