Shifting Ad Dollars
Thursday, March 30th, 2006
There’s no arguing that the online screening of the NCAA March Madness games was the most successful demonstration to date of TV on the web. No it wasn’t perfect. And many didn’t get in. Unlike TV where the broadcasting cost isn’t affected by how many actually watch the game, in practical terms bandwidth is not infinite for an online stream. CBS created an estimated audience and planned accordingly. They underestimated. They had to cap the number of simultaneous streams and the advertisers knew as well. But I doubt anyone had an inkling as to just how successful the project would be in terms of viewer demand.
When I watched the stream I personally found the games to be less cluttered with ads than on TV. There were only three commercials shown per break and there were some skyscrapers and banners on screen during the stream. Overall, I found the experience to be a good one as I said in this post. And it was free (unlike last year when it was by subscription only). Made free only because of advertisers.
While the 10 million viewers who tuned into the TV broadcasts of the first four rounds dwarfed the online version’s 4 million visitors, according to reports the advertisers were very satisfied. Demand for video advertising is clearly expected to increase for next year.
A survey released today from the Association of National Advertisers (ANA) and Forrester Research found that 78% of advertisers feel that over the last two years television advertising has lost effectiveness, and as a direct result they are exploring emerging technologies to help bolster their television advertising spend. According to the report, national advertisers are seeking alternatives and the ANA predicts that 80% of advertisers will spend more of their advertising budget on Web advertising.
It could very well be that online video advertising will end up being the beneficiary of some of those shifting dollars. The fact is that even when you take the success of the March Madness stream out of the picture, online video viewing has become a routine practice for many Internet users.
According to a study conducted by Frank N. Magid Associates in February:
- 24% of Internet users access online video at least once a week
- 46% watch online video at least once a month
- 27% of online video viewers watch an online newscast at least once a week
- 26% watch a funny video
- 66% reported having watched online video ads
- 44% of those taking action based on the ads they saw
Video ad watchers generally prefer short ads. However, 39% said they would watch ads that last longer than 30 seconds.
I’m not one of those people that believe TV advertising is dead or even on its deathbead. But I do believe that as marketers we have to constantly and agressively be seeking new strategies, methods and solutions. Doing merely the same old, same old IS a dead end.