2009 10 e-marketer_marketing_to_the_online_video_audience
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2009 10 e-marketer_marketing_to_the_online_video_audience 2009 10 e-marketer_marketing_to_the_online_video_audience Document Transcript

  • October 2009 Marketing to the Online Video Audience David Hallerman, Senior Analyst dhallerman@emarketer.comExecutive Summary: A significant barrier to online video advertising’s fullest potential is the audience’s attitudetoward such ads—most people do not trust them. Of 16 advertising tactics and media, online video ads ranked nearthe bottom for trust in an April 2009 Nielsen Online survey, among both the total respondent group and even teens,who are presumably more accustomed to online marketing. 105666 To surmount this hurdle, marketers will need to develop a mix ofAdvertising Tactics/Media Trusted* by Internet Usersin North America, by Age, April 2009 (% of ad formats that suits the increasingly varied content consumed byrespondents) the audience. For example, most video streams watched are 5 <20 Total minutes or less.At the same time, more and more short content isRecommendations from people I know 96% 92% professionally created, making it safe for brand marketers.Consumer opinions posted online 66% 72% Therefore, a less intrusive mix of preroll and other ad delivery formats, such as overlays, could help reduce audience resistance.Editorial content such as a newspaper article 81% 70%Brand Websites 82% 69% In addition, content providers are making more full TV showsE-mails I signed up for 55% 67% and movies available online, slowly shifting audience viewingAds in newspapers 68% 66% time away from television to the computer screen. That trendBrand sponsorships 77% 62% creates support for more-extensive video ads, such as longerAds in magazines 70% 62% preroll or midroll placements with creative that rivals TVAds on TV 75% 61% commercials for influencing the audience.Ads on radio 73% 61% Surveys over the past few years consistently show a significantAds before movies 75% 53% portion of the online audience—around one-quarter—is readyBillboards and outdoor advertising 65% 53% to pay some subscription fee to avoid advertising. But for manyAds served on search engine results 46% 37% people this is not an issue of ad-only versus ad-free. Instead,Online video ads 35% 33% the audience is focused on less-intrusive advertising.Online banner ads 26% 24%Text ads on a mobile phone 26% 18% The time is ripe for a video destination that offers a deep catalog ofNote: *participants responded that they trusted each tactic "completely" professionally created content supported by a blend of advertisingor "somewhat" and subscription fees.The reduced advertising would likely be lessSource: Nielsen Online, "Nielsen Global Online Consumer Survey," July2009 annoying and therefore more acceptable to audience members—105666 www.eMarketer.com and could attract a significant viewer base,giving it substantial scale for online video ad placements.This mixed business model is,of course,common in cable TV,newspapers and most magazines. Key Questions ■ Why do many people distrust online video advertising, and how can advertisers overcome that? ■ What ad methods are needed with short video content? ■ Is the online video audience as large as it appears? ® Digital Intelligence Copyright ©2009 eMarketer, Inc. All rights reserved.
  • The eMarketer ViewMany online audience members dislike or distrust However, expecting a lot of audience interaction with video ads isonline video advertising. And yet many of the same people misguided. Research shows fewer clicks with video ads than otherlike and trust TV commercials. The disparate responses to the two online formats, which makes sense. When people’s mindset issimilar ad formats are probably due to audience expectations— mainly on watching video content, they are less likely to be drawnsince much of online video content is ad-free, those clips or away by some commercial message.programs with advertising seem off-kilter or uninviting. Marketers and media companies both questionThat audience perspective will shift as marketers increasingly whether the online video audience will acceptimplement two key concepts: subscription-based video content or look to advertising alone. As the previous report in this series—■ Making the length of video ads suitable to the length of content, “Digital Video Advertising: Where’s the Money?”—concluded, so that they are not too pushy a hybrid of ad support and subscriber fees for video content could■ Devoting resources to develop high-quality video creative that is support substantial growth for Internet video advertising. well-targeted to the intended online audience For example, three-quarters of respondents to an IBM survey saidAudiences prefer less-intrusive advertising. Marketer ads are OK while the other one-quarter indicated they wouldresponse to that perspective will help shape trends in the online rather pay a fee to avoid advertising. However, for many peoplevideo advertising market. For instance, less may be more. An MTV the free/fee question is a gray area, where they will accept someNetworks/InsightExpress study found their audience liked how ads and reduced fees in exchange for a diversity of content.short preroll and overlay ad combinations appeared and then This three-quarters/one-quarter split is much like earlier researchdisappeared, making them lower-impact and less intrusive—but on the free/fee question. The fact that a significant minority iswith higher awareness metrics, too. willing to pay for their content hints at two business modelsMost people would prefer no advertising, in any besides advertising-only:medium. For online video advertising, this may mean a shift from ■ Fee-only, as with Netflix’s streaming videothe implicit agreement between advertisers and audience—theunsaid “we show you ads so you get to watch this video”—to an ■ A blend of fee and advertising, where ads reduce the fees andexplicit one based on greater transparency. That could involve the mixed revenues can support a wide range of video contentmaking the trade-off between ad-sponsored video (perhaps for Video destinations that offer extensive content in exchange forvalued content not available on TV) and audience time an obvious fewer ads and lower fees would likely attract a large audience.transaction. In this way, ad-supported video could be seen as a form That, in turn, would create a robust platform for video ads in anof e-commerce, where people purposely purchase online access to uncluttered environment.video with their attention to the advertising instead of money. Of the three key ways to evaluate video sites—While social media and video are a natural number of visitors, number of streams and streamscombination, marketers may find it difficult to include viewed per visitor—the last one indicates the mostvideo advertising in social media settings. First off, much of about potential engagement. And when you layer thethe video viewed on social media sites is user-generated, and not time people spend with video upon the type of content (short orattractive for many advertisers.And for those companies that look to long, professional or user-generated), a far clearer picturejump-start a viral video campaign through social networking, reality emerges of where to place ad dollars.sets in when they realize that relatively few social media users forwardcommercial video links. However, since successful viral marketing Furthermore, the same data indicates that the online videoneeds only a small number of carriers to spread the message, that audience is becoming more engaged. While the number of visitorsmight be less of a problem than it initially appears. Furthermore, many has grown by only single-digit percentages between February andviral videos can be low-cost, which allows marketers to test different July 2009, the average number of videos viewed by each audienceapproaches without much drag on the bottom line. member has jumped by anywhere from 18% to 50% (depending on the source) during the same period.Most research indicates that video ads tend to bemore effective at moving the brand needle than, That growth indicates that brand marketers that are not at leastsay, static banner ads. And because this is the Internet, testing some video advertising at this point will soon be behind thesome marketers or advertising technology firms expect all curve, trailing their competition.advertising to be interactive, including video. ® Marketing to the Online Video Audience 2
  • The eMarketer View Audience Attitudes About AdvertisingThe numbers game falls apart for online video,though, when compared with video viewed on The dance between advertisers and audiences tootelevision. When you contrast the total time US consumers spendwatching TV with the total time they spend viewing online video, the often becomes a push/pull struggle, whereWeb delivery channel looks like a mere rounding error at 1% of all advertisers look to push their messages andvideo time in Q2 2009, according to data from Nielsen Online. audiences look to pull away. That dynamic isHowever, the share of total online video time nearly doubled particularly stark for online video advertising. Thecompared with last year. So if it were to continue to double, thenthe audience would be spending 16% of their total video time in cost of such advertising is high and the opportunityfront of computers by 2013. Of course, such clear-cut methods for for branding is strong, so marketers strive to getestimating future trends seldom work out. Further, the breakdown the most from it. However, the potentialamong the three video screens—adding mobile to the mix—willlikely accelerate over time, with increasing hours of Internet- intrusiveness of video advertising makes manystreamed video viewed on TVs. At that point, the question of consumers shy away or consider it unacceptable.whether video ads will reach an online audience or a TV audiencewill likely become irrelevant. People tend to have less tolerance for online video ads than seemingly equivalent television commercials. While only 7% of online video viewers in an April 2009 survey from Frank N. Magid Associates and Metacafe said video ads on the Internet were more acceptable than TV commercials, nearly three times as many found online less acceptable than TV. But perhaps the most revealing response: 28% of viewers were undecided regarding video ads. That group signifies the undeveloped state of online video advertising, with its potential to reach target audiences through brand messages. Attitudes of US Online Video Viewers Toward Online Video Ads, April 2009 (% of respondents) Ads in online videos are more acceptable 7% Ads in online videos are about the same as ads in TV shows 45% Ads in online videos are less acceptable 20% Not sure 28% Note: n=1,279 ages 12-64 Source: Frank N. Magid Associates, "Magid Media Futures 2009: Opportunities in Online Video" sponsored by Metacafe, July 7, 2009 105281 www.eMarketer.com 105281 The large portion of “not sure” respondents also suggests that some people are unclear about what is or is not a video ad. For example, some consider a banner that runs next to a video player to be a video ad, while eMarketer does not. When video ads appear on network TV Websites, general attitudes improve. According to a study from Knowledge Networks, 34% of people who stream TV programs online find the ads relevant (which helps make them acceptable), with nearly one-half of those who download TV shows perceiving the ads as relevant. ® Marketing to the Online Video Audience 3
  • Audience Attitudes About AdvertisingThis result suggests that video ads attached to traditional content, Note: Dwell time is a newly developed metric that attempts tosuch as TV programs, will evoke more positive audience attitudes measure time as an engagement factor. Eyeblaster defines it asthan other types of online video. “the average number of seconds consumers intentionally spend engaging with an online ad. The metric sums the following userAttitudes of US Online Video Viewers Toward actions: amount of time the mouse was over an ad, user-initiatedNetwork TV Online Video Advertising, 2008 (% ofrespondents) video duration, user-initiated expansion duration, and any other Streamers Down- Total user-initiated custom interaction duration.” (n=710) loaders (n=1,915) (n=209) Average Time Spent on Online Advertising AmongAds on favorite TV programs are 34% 49% 34% Internet Users in the US and Canada, 2008usually relevant to me Dwell rate* AverageInclined to buy from companies that 26% 42% 27% dwell timeadvertise on my favorite TV programs (seconds)Note: ages 13-54 With video 7.53% 85.16Source: Knowledge Networks Inc. "How People Use TVs Web No video 5.56% 32.73Connections," March 18, 2009 as cited by Marketing Charts, March 26,2009 General 6.54% 57.58102722 www.eMarketer.com Note: excludes messenger ads; *cumulative instances of where a user102722 interacted with the ad divided by served impressions Source: Eyeblaster, "Trends of Time and Attention in Online Advertising,"A drill-down look at audience attitudes from Nielsen Online shows provided to eMarketer, July 22, 2009that audiences ages 30 and younger are more likely than older 106682 www.eMarketer.comviewers to find online video advertising funny, emotionally touching 106682and informative—qualities essential for brand marketing. For additional information on the above chart, seeYounger people tend to be more comfortable than their older Endnote 106682 in the Endnotes section.counterparts with online media, such as video. That comfort canlead to a higher level of engagement, such as the 55% of those 30 Online video ads work in large part because they are, in fact, quiteor younger who find video ads funny. Further, some of video ads comparable to TV commercials.are geared more toward a younger demographic, are more edgy in Similar to TV, simply noticing the advertised product/brand wascases, and are therefore perceived as funnier. the top response among active online video viewers in an AugustLevel of Engagement with Online Video Advertising 2008 Veoh Networks survey conducted by Forrester Consulting.by Internet Users in North America, by Age, April 2009(% of respondents) Funny Emotionally touching Informative<20 66% 41% 52%<30 55% 30% 44%30-34 40% 18% 30%35+ 42% 26% 31%Total 47% 27% 34%Note: respondents who "strongly agree" and "agree" that online video adsengaged them on each of these aspectsSource: Nielsen Online, "Nielsen Global Online Consumer Survey," July2009106683 www.eMarketer.com106683Attitudinal surveys only go so far, though, because sometimespeople remember incorrectly, wish to please the pollster or look togive the “right” answer. Data-based research might be more ontarget. And time spent might be a more accurate measure ofengagement than ideas such as touching, funny or informative.In that light, research from Eyeblaster shows that Internet users inthe US and Canada in 2008 spent 260% more “dwell time”engaging with an online video ad (85.16 seconds) than a plainbanner (32.73 seconds). Video ads work better than banneradvertising in that respect. ® Marketing to the Online Video Audience 4
  • Audience Attitudes About AdvertisingClicking on a video ad, in contrast, was relatively rare, done by 12% A different survey, conducted in August 2008 by iPerceptions, alsoor less of each group—even the super-active “connectors.” While found that video advertising rarely created interactivity, with onlythat group (which is typically younger than the other two segments) 11% of respondents saying they were likely to click.represented just 7% of online viewers, it consumed 20% of all onlinevideo and was responsible for 42% of all online video-sharing. Likelihood of US Internet Users to Click on Online Ads, by Format, August 2008 (% of respondents)Ad Responses of US Active* Online Video Viewers Text link 25%During Their Most Recent Online Video Site Visit, bySegment, August 2008 (% of respondents) Right banner 20%Noticed the product or brand that was advertised during my Top banner 12%video viewing experience Video ads 11% 48% 34% Interactive ads 7% 34% Interstitial 4%Clicked on an ad and registered for a sweepstakes or giveaway Source: iPerceptions Inc. survey provided to eMarketer, October 6, 2008 12% 098895 www.eMarketer.com 3% 098895 4% Similar to the Nielsen Online data, younger video viewers in theClicked on an ad that was part of or next to a video I was iPerceptions survey were more likely to click on video ads thanwatching and learned more about the product or service 9% older ones. That might point to longer-term trends, where video 3% ads will offer a greater degree of interactivity to an increasingly 5% available audience.Clicked on an ad and signed up for more information Demographic Profile of US Internet Users Who Are 6% Likely to Click on Online Ads, by Format, August 2008 3% (% of respondents) 2% Text Right Top VideoPurchased a product links banner banner ads 4% Age 2% <25 14% 14% 23% 31% 2% 25-34 19% 19% 22% 21% Connectors Controllers Watchers 35-44 19% 22% 22% 14% 45-54 22% 22% 18% 16%Note: n=415 (watchers); n=397 (controllers); n=193 (connectors); ages 13+;*those who watch more than 1 hour of online video per week 55-64 18% 16% 10% 13%Source: Veoh Networks, "Watching the Web: How Online Video Engages 65+ 7% 6% 4% 5%Audiences" conducted by Forrester Consulting, October 8, 2008098734 www.eMarketer.com Income098734 <$50,000 36% 33% 39% 49% $51,000-$75,000 18% 20% 18% 18%For additional information on the above chart, see $76,000-$100,000 15% 16% 11% 11%Endnote 098734 | 098735 in the Endnotes section. $101,000-$150,000 16% 15% 17% 10% $151,000-$250,000 10% 11% 9% 7% $250,000+ 5% 5% 6% 6% Frequency* First visit 17% 12% 14% 19% Daily 29% 31% 36% 33% Weekly 33% 34% 31% 31% Monthly 15% 16% 14% 12% Sporadic 7% 7% 5% 6% Note: numbers may not add up to 100% due to rounding; *frequency of visiting the site on which the ad appears Source: iPerceptions Inc. survey provided to eMarketer, October 6, 2008 098896 www.eMarketer.com 098896 ® Marketing to the Online Video Audience 5
  • Audience Attitudes About AdvertisingRichly populated video destinations supported by a blend of For example, while 86% of the respondents in an April 2009 Ipsosadvertising and subscriber fees could draw large audiences MediaCT survey said ad-supported full-length TV shows were very orand therefore contribute to substantial growth for Internet somewhat reasonable, 50% said the same thing about ad-supportedvideo advertising. (For more information on video advertising amateur or homemade video clips.revenue models, see eMarketer’s August 2009 report,“Digital Video Advertising: Where’s the Money?”) US Online Video Viewers’ Acceptance of Free, Advertising-Supported Online Video, by Type ofWhen the IBM Institute for Business Value asked US Internet users Content, April 2009 (% of respondents)if they preferred fee or free for online video content, 74% said ads Very Somewhat Not very Not at all reasonable reasonable reasonable reasonablewere OK and 26% would pay to avoid advertising. Full-length 37% 49% 7% 7% TV showsThis three-to-one split is consistent with prior research on the Full-length 35% 43% 12% 10%fee/free question. Those willing to pay subscription fees hint at moviestwo business models besides advertising-only: fee-only, as with Movie/TV 26% 39% 17% 18%Netflix’s streaming video; or a blend of fee and advertising, where trailers or previewsthe ads support lower costs and a broad range of video content. Amateur or 22% 28% 20% 31% homemade video clipsInternet Users in Select Countries Who Are Interestedin Online-Video-Ad-Supported Content vs. Paid Online Note: n=939 ages 12+Content, Q3 2008 (% of respondents) Source: Ipsos MediaCT, "MOTION study," September 9, 2009 106714 www.eMarketer.comJapan 106714 80% 20% That relatively high figure for advertising on user-generated videoAustralia clips is somewhat surprising, when common wisdom says 75% 25% virtually all Internet users think user-generated media should beUS ad-free. Ipsos’ research might encourage some advertisers—that 74% 26% were previously skittish about putting their brand messages intoUK user-generated video clips—to do so. 73% 27%Germany Video Ad Format Preferences 69% 31% The debate over how much Internet users will accept preroll videoIndia ads continues. Furthermore, some video advertising advocates 64% 36% decry the preroll format because it fails to take advantage of the Would watch advertising before or after quality, free content Internet’s interactivity. Would pay to avoid advertisingNote: n=2,800 ages 13+Source: IBM Institute for Business Value, "Digital Consumer Survey ResultsNovember 2008" provided to eMarketer, November 17, 2008100325 www.eMarketer.com100325That blend—common to other media such as cable TV, mostmagazines and newspapers—would require large-scale offeringsof online video content to attract a large audience.The audience’s acceptance of video ads depends on the nature ofthe content. This is not surprising. ® Marketing to the Online Video Audience 6
  • Audience Attitudes About AdvertisingNevertheless, audiences find preroll ads familiar, the closest online The audience preferences in the Veoh/Forrester study pointed to aanalogue to TV commercials.While most people prefer no advertising, basic fact of advertising:The less intrusive, the more people accept it.in any medium, 29% of the IBM Institute’s respondents preferred Among those who watched full-length TV programs online, slightlypreroll and postroll ads over any other online video ad format. more preferred static banner ads (43%) than preroll video ads (37%). Far fewer cited a preference for midroll or postroll placements.Online Video Advertising Formats that Internet UsersWorldwide* Prefer to View, Q3 2008 (% of Ad Types Preferred by US Active* Online Videorespondents) Viewers Who Watch Full-Length TV Programs Online,Video before/after content August 2008 (% of respondents) 29% Do not Watch Watched watch full- full-lengthAds in frames surrounding content full- length in most length recent 12% sessionVideo during content Banner ads that are next to the video I 39% 43% 38% 8% am watching Video ads that come on before the 36% 37% 39%Sponsored with showcased products video I watch 8% Video ads that show in between videos 11% 19% 23%Note: n=2,800 ages 13+; *Australia, Germany, India, Japan, the UK and the or segments of videos I watchUS Video ads that come on after the video 18% 14% 18%Source: IBM Institute for Business Value, "Digital Consumer Survey Results I watchNovember 2008" provided to eMarketer, November 17, 2008100326 www.eMarketer.com Ads that come up over the bottom of the 21% 21% 20% video I am watching but dont interrupt100326 the videoWhen Razorfish contrasted preroll with other types of online Ads that come up when I pause the video 11% 17% 19%advertising, however, more active online consumers preferred I am watchingbanners than streaming video ads. However, substantially more Note: n=1,013 ages 13+; *those who watch more than 1 hour of online video per weekrespondents preferred preroll to tickers, also called video overlay ads. Source: Veoh Networks, "Watching the Web: How Online Video Engages Audiences" conducted by Forrester Consulting, October 8, 2008 098741 www.eMarketer.comOnline Advertising Formats Preferred by USConnected Consumers, June 2008 (% of respondents) 098741 In addition, 37% of people who viewed network TV shows online inBanner ads on same page 44.44% 2008 also watched preroll ads, according to Knowledge Networks.Preroll 33.63% Of course, a higher share of online TV shows and clips containInterstitials 13.10% preroll than do run-of-the-mill online videos.Tickers 8.83% US Network TV Video Streamers Who Watch PrerollSource: Razorfish, "Digital Consumer Behavior Study" as cited in "FEED: Ads, 2006 & 2008 (% of respondents)The Razorfish Consumer Experience Report," October 2008099240 www.eMarketer.com Watch video with preroll ads099240 30% 37%For additional information on the above chart, see Watch video without preroll adEndnote 099240 in the Endnotes section. 15% 10% 2006 2008 Note: ages 13-54 Source: Knowledge Networks Inc. "How People Use TVs Web Connections" as cited in press release, March 18, 2009 102725 www.eMarketer.com 102725 For more about ad formats, the video “Online Video Primer: Video Ad Types” is available on eMarketer’s Website. Download video ® Marketing to the Online Video Audience 7
  • Audience Attitudes About AdvertisingResponse to Ad Formats However, longer video ads offer more potential to engage theWhile the preroll is ubiquitous, that may not make it the most audience.That can be seen among the 42.2% who said the 30-secondeffective form of online video advertising. preroll was an ad they would stop and look at, 7 percentage points higher than for the other two types of advertising.A July 2009 study from MTV Networks and InsightExpressexamined how people react to preroll alone and to preroll blended The flip side appears in the 68.4% who agreed that 5-secondwith two other ad formats: preroll plus lower 1/3 was short and let them get to their video quickly. Note too that clicking or interacting with any of the three■ What MTV calls a “lower 1/3,” which is a form of overlay ad formats got the lowest positive responses.■ The “sideloader,” which is a banner ad that slides out of the right-hand side of the video screen approximately 10 seconds US Internet Users’ Attitudes Regarding Online Video Advertising Campaigns on MTV Networks, by Type of after video playback begins Ad, January-April 2009 (% of respondents*)For unaided brand awareness, the addition of the lower-1/3 5-second 5-second 30- preroll preroll secondoverlay to a 5-second preroll, for example, performed better + + preroll lower 1/3 sideloaderagainst the control group (who had not seen any of the video More intrusive than other ad formats 24.7% 29.2% 30.0%formats) than the 30-second preroll alone. The implication is that Liked that it didn’t interrupt the video 64.5% 57.9% 61.8%less-intrusive advertising can also be more effective. An ad I would stop and look at 35.0% 35.2% 42.2%Note, however, that all these ads were tested against short-form The way the ad was delivered was cool 44.1% 43.2% 45.7%content, where a 30-second preroll might be disproportionate. An ad I would click on or interact with 23.4% 25.1% 25.1%Most short-form content, even professionally made, tends to have Length of the ad was appropriate 61.0% 60.5% 63.1%15-second prerolls at most. Ad was short and let me get to my 68.4% 64.2% 58.6% video quicklyBrand Metrics for US Online Video Advertising An ad I’d like to see again 24.6% 26.5% 29.8%Campaigns on MTV Networks, by Type of Ad, Note: n=403 (5-second preroll + lower 1/3); n=427 (5-second preroll +January-April 2009 (% of respondents) sideloader); n=353 (30-second preroll); *respondents who answered “agree” or “strongly agree” on 5-point scale Control 5-second 5-second 30-second Source: MTV Networks, "Project Inform" conducted by InsightExpress, July preroll preroll preroll 2009 + + 106674 www.eMarketer.com lower 1/3 sideloader 106674Unaided awareness 12.6% 22.9% 17.6% 19.8%Aided awareness 72.9% 81.0% 79.4% 81.7% For additional information on the above chart, see EndnoteOnline ad awareness 29.2% 56.2% 56.1% 47.5% 106674 | 106676 | 106669 in the Endnotes section.Purchase intent 41.4% 44.2% 36.3% 37.9%Note: n=2,306 (control); n=403 (5-second preroll + lower 1/3); n=427(5-second preroll + sideloader); n=353 (30-second preroll) When MTV/InsightExpress examined the elements of video ads toSource: MTV Networks, "Project Inform" conducted by InsightExpress, July2009; eMarketer calculations, September 2009 see what people liked best, they found relatively broad support for106669 www.eMarketer.com several features. For example—and not surprising—106669 approximately 39% of respondents favored animation or motion in ads, regardless of how the ads were delivered.For additional information on the above chart, see Endnote106674 | 106676 | 106669 in the Endnotes section.“30-second prerolls are a nightmare on Web video. Nobody wants to see that.” —Dina Kaplan, co-founder and chief operating officer, blip.tv, in a video interview on The Business Insider,August 31, 2009Certainly, more respondents to the MTV/InsightExpress surveyfound 30-second preroll ads more intrusive than the short prerolland overlay combination. ® Marketing to the Online Video Audience 8
  • Audience Attitudes About AdvertisingHowever, remember that most people prefer less-intrusive ads. So When Nielsen Online asked Internet users worldwide which of 16it is also no surprise that the highest response rate was for advertising tactics or media they trusted somewhat or completely,appearing/disappearing 5-second preroll ads combined with lower online video ads ranked 14th, cited by only 37% of respondents. In1/3 or sideloader, and lower for the longer 30-second preroll. contrast, 62% said they trusted TV commercials.US Internet Users Who Liked Elements of Online Advertising Tactics/Media Trusted* by Internet UsersVideo Advertising Campaigns on MTV Networks, by Worldwide, April 2009 (% of respondents)Type of Ad, January-April 2009 (% of respondents*) 5-second 5-second 30- Recommendations from people known 90% preroll preroll second + + preroll Consumer opinions posted online 70% lower 1/3 sideloader Brand Websites 70%Animation or motion of the ad 38.8% 39.8% 40.4% Editorial content (e.g., newspaper article) 69%Movement of ad across the screen 32.4% 37.9% 30.9%How the ad appears and then disappears 43.9% 47.9% 38.5% Brand sponsorships 64%Ability to expand the ad 31.7% 33.9% 29.4% TV 62%Ability to click a link in the ad 36.4% 38.8% 30.9% Newspapers 61%Ability to see a longer video ad with a 34.2% 36.3% 29.5%click Magazines 59%Note: n=403 (5-second preroll + lower 1/3); n=427 (5-second preroll + Billboards/outdoor advertising 55%sideloader); n=353 (30-second preroll); *respondents who answered“agree” or “strongly agree” on 5-point scale Radio 55%Source: MTV Networks, "Project Inform" conducted by InsightExpress, July2009 E-mails signed up for 54%106676 www.eMarketer.com Ads before movies 52%106676 Search engine results ads 41%For additional information on the above chart, see Endnote Online video ads 37%106674 | 106676 | 106669 in the Endnotes section. Online banner ads 33% Text ads on mobile phones 24%Dislike for Video Ads Note: *participants responded that they trusted each tactic "completely"The MTV/InsightExpress focus on drill-down details of what the or "somewhat"audience likes is rarely seen research. But the audience’s general Source: Nielsen Online, "Nielsen Global Online Consumer Survey" as cited in company blog, July 7, 2009dislike of advertising, including video, comes through loud and clear. 105383 www.eMarketer.com 105383 Why the gap between the two similar advertising formats? Expectations are likely a big part of it, since people are accustomed to TV commercials but expect free online content. That audience attitude might evolve over time, as marketers learn how to better blend high-quality video ad creative into professional video content, which is becoming increasingly available. However, even though only about one-third of Internet users trusted video ads to some degree, two-thirds (67%) of the respondents agreed or strongly agreed with the statement that advertising supports low-cost and free content on the Internet, TV and other media. ® Marketing to the Online Video Audience 9
  • Audience Attitudes About AdvertisingThat understanding of the implicit contract between advertisers The Veoh/Forrester study also illustrated the imbalance betweenand audience offers hope to marketers that, with time creating audiences finding video ads annoying (which reduces trust) andfamiliarity, people will come to trust online video ads more. the trade-off of ads for free content. Whether the respondentsFurther, that understanding opens the door to more transparency, were categorized as active connectors or more passive watchers,such as when marketers sponsor video content of substantial about 20% more called video ads annoying than those whovalue. In that scenario, the audience is made aware of both the thought of them as fair to help pay for video services.marketer’s message and the content’s worth. Attitudes Toward In-Video Ads Among US Active*Attitudes of Internet Users Worldwide Toward the Online Video Viewers, by Segment, August 2008 (% ofValue of Advertising, April 2009 (% of respondents) respondents) Strongly Agree Dis- Strongly No In-video ads are annoying agree agree dis- opinion 61% agree 59%Advertising and sponsorships 22% 59% 10% 3% 6%are important to fund sporting 58%events, art exhibitions andcultural events In-video ads are fair as they help pay for online video servicesBy helping companies succeed, 41% 15% 65% 12% 2% 7%advertising creates jobs in 37%those companies and in the 34%advertising industryAdvertising stimulates I avoid Websites that use in-video advertising 16% 52% 22% 5% 6%competition which leads to 19%better products and lower 21%prices 23%By providing me with 14% 53% 22% 6% 5%information, advertising allows In-video ads are useful when they feature something I amme to make better consumer interested inchoices 28%Advertising funds low-cost and 14% 53% 18% 4% 11% 19%free content on the Internet, TV,newspapers and other media 19%Advertising contributes to 13% 58% 17% 3% 8% In-video ads can be entertaininggrowth of the economy 23%Advertising often gets my 13% 53% 21% 7% 5% 17%attention and is entertaining 10%Advertising provides useful 13% 50% 23% 7% 7%information on important Connectors Controllers Watchersissues in society, such assafety and health Note: n=415 (watchers); n=397 (controllers); n=193 (connectors); ages 13+; *those who watch more than 1 hour of online video per weekSource: Nielsen Online, "Nielsen Global Online Consumer Survey," July Source: Veoh Networks, "Watching the Web: How Online Video Engages2009 Audiences" conducted by Forrester Consulting, October 8, 2008105659 www.eMarketer.com 098735 www.eMarketer.com105659 098735 For additional information on the above chart, see Endnote 098734 | 098735 in the Endnotes section. ® Marketing to the Online Video Audience 10
  • Audience Attitudes About AdvertisingSocial Media and Video Advertising It is clear why social media users attract marketers interested inThe audience dislike of online video advertising encourages some online video. For one, 53% of social network users watched moremarketers to believe that social media will help them break down online video than TV in Q4 2008, according to LiveRail.barriers.That perspective is reinforced by responses to a GfK Ropersurvey, where only 29% of respondents cited marketing on social US Social Network Users Who Watch More Online Video Than TV, Q4 2008 (% of respondents)networking sites as annoying, compared with 50% who were annoyedby ads during online or offline video-on-demand programming. Watched more online video than TV 53%Types of Ads/Promotions that US Internet Users Find Watched about the sameAcceptable or Annoying, September-October 2008 (% 19%of respondents) Watched more TV than online video Quite Find acceptable annoying 28%Free product sample distributed by people or 67% 12% Note: n=400+ ages 18-24included in magazines/newspapers Source: LiveRail, "State of the Industry: LiveRail’s Q4 2008 review of onlineNewspaper ads 56% 12% video advertising," January 19, 2009 101066 www.eMarketer.comMagazine ads 50% 19% 101066Radio ads 43% 29% However, much of that watching was undoubtedly of user-generatedAds on TV 42% 37%Product placement in movies/TV programs/video 31% 36% content (which most advertisers shun).That trend is seen in agames March–April 2009 survey by the Pew Internet & American Life Project,Unconventional marketing* 24% 37% which found that 62% of respondents viewed user-generated videosSocial networking sites or blogs 23% 29% on a sharing site.Paid ads in search engine results 21% 48%Product placement in virtual worlds 15% 24% Online Social Media Activities of US Internet Users,Ads during video-on-demand programming 10% 50% March-April 2009 (% of respondents)Web ads that play before landing/obscure 8% 79% Watch user-generated video on a sharing site 62%homepagePop-up or banner ads on Websites 6% 83% Use social networking sites 46%Ads on mobile phones 5% 70% Use Twitter/share updates 11%Unsolicited e-mail 4% 84% Note: n=1,687 ages 18+Note: n=2,000 ages 18+; *ads in unconventional places or the use of Source: Pew Internet & American Life Project, "The Audience for Onlineindividuals to spread the word about products/services Video-Sharing Sites Shoots Up," June 17, 2009Source: GfK Roper, "Media, Advertising & Consumers," provided to 105811 www.eMarketer.comeMarketer, November 20, 2008 105811100164 www.eMarketer.com100164The thinking is that video’s prevalence on social network sites—and the social elements of sharing, forwarding and commentingon video sites—helps put the “media” in social media. And,therefore, video and social media would naturally go together. ® Marketing to the Online Video Audience 11
  • Audience Attitudes About AdvertisingIn response to the connection between social media and video, Note that a link to the survey was originally posted on Twitter and was63% of brand marketers and 60% of agency executives in June and reposted by other marketers on Facebook and blogs.ThatJuly 2009 told Equation Research that online videos were part of methodology naturally draws in those already involved in social media.their social media efforts, right up there with Facebook and Twitter. Social Media Used by US Marketers, January 2009 (%Social Media Used for Marketing According to US of respondents)Brand Marketers and Ad Agencies, June-July 2009 (% Twitterof respondents) 86% Brand Agency BlogsFacebook 80% 84% 79%Twitter 69% 76%Online videos 63% 60% LinkedIn 78%Blogs 57% 72%Podcasts 34% 28% FacebookMySpace 34% 25% 77%Webcasts 33% 31% YouTube or other videoUser forums 33% 22% 41%Widgets 30% 23% Social bookmarking sites (i.e., Delicious)Wikis 24% 19% 38%Other 21% 25% ForumsNote: n=123 brand marketers; n=264 ad agencies 38%Source: Equation Research, "2009 Marketing Industry Trends Report,"August 18, 2009 StumbleUpon106250 www.eMarketer.com 28%106250 Digg, reddit, Mixx or similar siteA lesser, but still significant, percentage of marketers (41%) in a 26%March 2009 Michael A. Stelzner survey said they made video—eitheron YouTube or other sites—part of their social media outreach. FriendFeed 18% Source: Michael A. Stelzner, "Social Media Marketing Industry Report," March 17, 2009 102683 www.eMarketer.com 102683 For some companies, the primary way to blend video advertising and social media is through viral marketing. ® Marketing to the Online Video Audience 12
  • Audience Attitudes About AdvertisingAt this stage of the game, viral video is a low-cost process. The January 2009 survey from Lightspeed Research found 39% ofAccording to a MarketingSherpa survey in October and November respondents shared a video clip—not just during their most recent2008 of marketers who created one or more viral videos during the visit, as in the Veoh/Forrester poll, but ever. When you considerprior year, the budgets for 62% of respondents ranged from only that successful viral marketing needs only a small number of$101 to $10,000. That low financial impact encourages companies carriers to spread the message, that figure gives ammunition toto try viral video marketing, since the cost of failure is so small. those looking to combine video with social media.Amount US Marketers* Spend on Viral Video,October-November 2008 (% of respondents) Online Video and Social Networking Activities of US Internet Users, January 2009 (% of respondents)$0 11% Watched a video clip 72%$1-$100 15% Read a blog 46%$101-$500 16% Managed a social network profile 41%$501-$1,000 16% Shared a video clip 39%$1,000-$10,000 30% Uploaded a video clip 32%$10,001-$100,000 12% Wrote a blog 18% $100,000+ 1% Note: ages 16-64Note: n=1,083; numbers may not add up to 100% due to rounding; *who Source: "Global Web Index" conducted by Lightspeed Research, May 28,created one or more viral videos in the past year 2009Source: MarketingSherpa, "Video Marketing Survey," April 10, 2009 104104 www.eMarketer.com103091 www.eMarketer.com 104104103091 However, much of that video-sharing has little to do withHowever, forwarding video links—the main element marketerslook for with viral video—may not be all that common. In the marketing, since forwarding links to commercial videos is lessVeoh/Forrester survey, only 21% of active video viewers said they common. In 2006, for example, 26% of those people who viewedpassed along a video or a link during their last visit to an online network TV sent a friend a video ad link. But by 2008, that figurevideo site. In comparison, 37% performed no type of social activity. dropped to only 17%, according to Knowledge Networks. In this case, it seems the more common video ads become online, theSocial Activities of US Active* Online Video Viewers less noteworthy as well.During Their Most Recent Online Video Site Visit,August 2008 (% of respondents) US Network TV Video Streamers Who HaveRead comments from others Forwarded a Link to a Commercial or Advertiser 40% Video, 2006 & 2008 (% of respondents)Looked at the ratings others had given the video 2006 26% 28% 2008 17%Sent a video or link to a video to someone else Note: ages 13-54 21% Source: Knowledge Networks Inc. "How People Use TVs Web Connections" as cited in press release, March 18, 2009Rated a video I was watching 102723 www.eMarketer.com 17% 102723Posted a comment on a video that I watched The adage holds true: You cannot make an ad go viral. Social 11% networks can help because of some of the built-in notificationPosted a video or link to a video on my blog or social networking options that are in place—if users view an ad or comment on it, apage (e.g., Facebook, MySpace) notification goes to their friends on their newsfeed. But if the 6% audience doesn’t find the ad interesting enough to view in the firstBookmarked to a social media or bookmarking site (e.g., Digg,StumbleUpon, Delicious, reddit, etc.) place, it doesn’t matter. 5%None of the above 37%Note: n=1,013 ages 13+; *those who watch more than 1 hour of onlinevideo per weekSource: Veoh Networks, "Watching the Web: How Online Video EngagesAudiences" conducted by Forrester Consulting, October 8, 2008098731 www.eMarketer.com098731 ® Marketing to the Online Video Audience 13
  • What People Watch (and Why)To overcome audience resistance to online video “Our research shows the Internet is aadvertising, marketers must find an appropriate fundamentally different experience for consumers than television. Online, they arematch between the ad and the associated content. watching shorter clips in general. They’reThe plethora of video types that people watch on browsing. They’re discovering. They’rethe Web complicates matters for advertisers. searching. I think it just confirms something that I think we’ve known for a while but theThe majority of video content people watch online is short video, market overlooks, which is the newat least when measured by streams instead of viewing time. consumer behavior and new opportunity isAmong the active viewers polled by Veoh/Forrester, 51% or more in video.” —Erick Hachenburg, CEO, Metacafe,watched various short-form content (such as user-generated); in an interview with eMarketer, July 2009clips from movies, music or TV shows; and local or national news. Similar data from the Magid/Metacafe report also show thatTypes of Online Video Content Viewed by US Active* people mostly watched short content: user-generated video, newsOnline Video Viewers, August 2008 (% of respondents) stories and music videos topped this list.Video posted by people like me (e.g., on YouTube, Google Video) 71% Only 25% of respondents in this survey regularly watched full-lengthMovie clips or trailers TV shows, or one-half of the figure in the Veoh/Forrester poll. However, 63% Magid/Metacafe surveyed the broad audience of people who haveMusic clips or trailers ever watched video content online, while Veoh/Forrester surveyed 59% only those who watched more than 1 hour of video per week.Clips from current TV programs 57% Types of Online Video Watched Regularly by USNational/local news Online Video Viewers, April 2009 (% of respondents) 55% Videos shot and uploaded by consumers to sites like YouTube 42%Comedy or other humorous online videos 51% News stories 32%Full-length current TV episodes Music videos 31% 50% Movie previews 29%Sports news/highlights/events 39% Comedy/jokes/bloopers 26%Full-length movies Full-length TV shows 25% 33% Weather 20%Clips of TV shows that arent on TV anymore Clips of TV shows 18% 32%Full-length TV episodes that arent on TV anymore Sports content 16% 28% Full-length movies 15%Commercials or promotional video created by companies to Adult entertainment* 14%promote their brands 25% Video game content 12%Animation, anime and cartoons Short films 10% 25% TV previews 9%Adult entertainment 20% TV commercials 7%Note: n=832 ages 13+; viewed in the past month; *those who watch more Other 3%than 1 hour of online video per weekSource: Veoh Networks, "Watching the Web: How Online Video Engages None 6%Audiences" conducted by Forrester Consulting, October 8, 2008 Note: n=1,279 ages 12-64 who have ever watched online video content;098724 www.eMarketer.com *asked of respondents ages 18+ Source: Frank N. Magid Associates, "Magid Media Futures 2009:098724 Opportunities in Online Video" sponsored by Metacafe, July 7, 2009 105276 www.eMarketer.com 105276 ® Marketing to the Online Video Audience 14
  • What People Watch (and Why)Among US Internet users in general, the UK Office of Ad Length versus Content LengthCommunications (Ofcom) found that 47% watched short video How long a video ad runs is often directly related to the length ofclips, but only 23% watched longer video content such as feature the content. Logical. Many marketers understand this, as in a fallfilms or complete TV programs. 2008 survey from MarketingSherpa, where 48% of respondents said that for each 60 minutes of online video content, the idealOnline Video Consumption of Internet Users in Select length of advertising would be 1 to 5 minutes. At the high end, 5Countries, by Type, October 2008 (% of respondents) minutes of advertising would mean one 30-second streaming ad Watch or Watch or download download short longer video (preroll or midroll) for every 6 minutes of content. video clips* content**Canada (n=1,000) 50% 22% Ideal Length of Ads per Online Video Content-HourGermany (n=1,002) 47% 14% According to US Marketers, October-November 2008 (% of respondents)UK (n=1,001) 47% 23%US (n=1,010) 47% 23% 0 minutes/find other methods 10%Italy (n=1,003) 45% 27% 1-5 minutes 48%France (n=1,000) 43% 21% 5-10 minutes 29%Japan (n=1,003) 39% 18%Note: ages 18-64; *including those made by other people; **such as 11-15 minutes 11%feature films or complete TV programsSource: Office of Communications (Ofcom) - UK, "The International 16-20 minutes 2%Communications Market 2008” conducted by Synovate, November 20,2008 Note: n=1,083100522 Source: MarketingSherpa, "Video Marketing Survey," November 2008 as www.eMarketer.com cited in "Marketing With Video Report: Online, TV & Mobile," December100522 2008Even though short videos limit marketers’ options, professionally 103551 www.eMarketer.com 103551made short content is often welcomed by both advertisersand audiences. Audience surveys indicate that even though many enjoy short professional clips, they still express limits on the advertisingThe Magid/Metacafe report focused on short-form professional attached to the content. Perhaps those limits are not as strict ascontent that averaged 90 seconds, including music videos, movie anecdotal evidence suggests.trailers, TV clips and sports highlights. Among Internet users whowatched such pieces, 37% said the content was equally or more A 2007 Dynamic Logic study found that a 10-second-plus preroll adentertaining than full-length TV programs shown on a TV set. was all that Internet users were willing to watch before a 5-minute clip—although ad length tolerance nearly doubled to over 20 secondsThat result reinforces the predominance of video snacking on the when the study excluded those unwilling to watch any advertising.Web, where the lean-forward nature of the medium encouragesshort consumption. That also implies brand marketers might dowell to develop more video ads that suit the growing universe ofshort professional video content.US Online Video Viewers* Who Find ShortProfessional Online Clips** Equally or MoreEntertaining than Full-Length TV Shows on a TV Set,April 2009 (scale of 1-5)1 (strongly agree) 13%2 24%3 41%4 14% 5 (strongly disagree) 8%Note: n=883 ages 12-64; *who watch short professional online clips;**includes music videos, movie trailers, TV clips, video game trailers andsports highlightsSource: Frank N. Magid Associates, "Magid Media Futures 2009:Opportunities in Online Video" sponsored by Metacafe, July 7, 2009105275 www.eMarketer.com105275 ® Marketing to the Online Video Audience 15
  • What People Watch (and Why)While there have been many changes in the online video universe Professional versus User-Generatedsince this study was done two years ago, the greater abundance The US audience’s taste for online video appears balanced,of video today makes many Internet users more accustomed to according to Deloitte’s annual “State of the Media Democracy”advertising, even as it also makes some more resistant to online report, with 70% watching user-generated and 71% watching thevideo ads. professional kind.Average Length of Ad that US Internet Users Are US Internet Users Who Watch User- and ProfessionallyWilling to Watch Before an Online Video, September Generated Video, September-October 2008 (% of2007 (seconds) respondents)Video length Length of ad Length of ad Watch user-generated video 70% among all users excluding users (seconds) unwilling to of which: % who regularly watch a complete video 80% watch any ad Watch professionally generated video 71% (seconds) of which: % who regularly watch a complete video 79%10-minute clip 14.70 26.90 Note: n=2,0565-minute clip 10.78 20.36 Source: Deloitte, "State of the Media Democracy Third Edition," provided to2-minute clip 7.23 13.71 eMarketer, January 12, 2009 105617 www.eMarketer.com1-minute clip 6.23 11.44 10561730-second clip 4.61 8.58 Not only do brand marketers trust professionally created videos15-second clip 3.48 6.13 far more than user-generated, but nearly all longer (10 minutes orNote: n=933 ages 18+Source: Dynamic Logic, "AdReaction 2007: Consumers Perceptions of more) online videos are professional content. The universe ofAdvertising," provided to eMarketer, October 2007 professional video content can be categorized into several types:106681 www.eMarketer.com106681 ■ Full TV showsHowever, when audiences watched short videos of 5 minutes or ■ Full moviesless, their ad time tolerance got restricted, along with the ad’splacement. The same Dynamic Logic study found that for midroll ■ Clips from TV shows or moviesads, a 5-second spot was OK for 75% of respondents, but only 11%of respondents or fewer were willing to watch when the ad length ■ Made-for-the-Web shows (often less than 10 minutes long)grew to 10 seconds or more. ■ News, weather, sports (often from TV networks or local stations)Length of Ad* US Internet Users Are Willing to Watch ■ Educational and informationalDuring Their Online Video**, September 2007(seconds) Before the During the After the “Most advertisers want to have a high degree video video video<5 seconds 45% 75% 47% of comfort around the nature of the content10 seconds 23% 11% 19% that they are sponsoring.And so the sheer15 seconds 16% 5% 14% process of managing the millions of assets out30 seconds 12% 6% 14% there—it would really only come down to the45 seconds 2% 1% 2% most popular. OK, squirrel on a skateboard,1 minute 2% 2% 3% that gets 10 million views.Why not? But by the2+ minutes 0% 1% 1% time it got to 10 million views, it would be tooNote: n=933 ages 18+; *before, during or after the online video; **fiveminute news clip or video late. Maybe you’d catch the last millionSource: Dynamic Logic, "AdReaction 2007: Consumers Perceptions of views.” —Brian Wieser, SVP global director of forecasting,Advertising," provided to eMarketer, October 2007092814 www.eMarketer.com MAGNA, in an interview with eMarketer, June 2009092814 The online video audience spends more time watching professional content, too. That extended time gives marketers more opportunities to place ads in front of them, and more opportunities to test different ways of delivering video-based marketing messages. ® Marketing to the Online Video Audience 16
  • What People Watch (and Why)According to Deloitte’s survey from September and October 2008, In the Magid/Metacafe study, the same under-34 demographicwhen US Internet users watched user-generated videos, they was most likely to watch short professional clips, too. And in everyaveraged 8 minutes, compared with 12 minutes for professional age category other than teens, more males than females watchedvideo content. such video content.Average Length of User- and Professionally Generated US Online Video Viewers Who Watch ShortVideos Watched by Internet Users in Select Countries, Professional Online Clips,* by Age and Gender, AprilSeptember-October 2008 (minutes) 2009 (% of respondents in each group) Brazil Germany Japan UK US Male FemaleUser-generated 7 6 11 7 8 12-17 55% 59%Professionally generated 12 9 13 10 12 18-24 61% 48%Source: Deloitte, "State of the Media Democracy Third Edition," provided to 25-34 64% 46%eMarketer, January 12, 2009 35-44 52% 45%100979 www.eMarketer.com 45-54 43% 39%100979 55-64 49% 39%The likelihood that people will watch full-length TV programs Note: n=1,279; *includes music videos, news stories, movieappears to shift far more based on age and income than by previews/trailers/clips, short films, TV show clips, TV previews, weather,gender. In the Veoh/Forrester study, younger audience members video game content and TV commercials Source: Frank N. Magid Associates, "Magid Media Futures 2009:with lesser incomes represented the biggest groups consuming Opportunities in Online Video" sponsored by Metacafe, July 7, 2009TV episodes. 105277 www.eMarketer.com 105277For now, at least, that indicates that online video advertising for a Whether professional or user-generated, video content thatyounger target demographic might be more efficient, as the captures audience attention will better sustain any attachedadvertising messages will reach a larger audience. Further, it advertising. According to a May 2009 Lightspeed Research report,points to how brand marketers that are making video ads just for “Online Video: 2009 is Primetime,” three types of professionalthe Web should look to add creative elements that will appeal to video that got relatively high attention were news highlights,the same demo. movie trailers and music videos. Since the latter two are, in fact, forms of advertising all by themselves, it would seem that newsDemographic Profile of US Active* Online Video clips might be one of the best types of short-form content in whichViewers Who Watch Full-Length TV Programs Online,August 2008 (% of respondents) to place video ads. Do not watch Watch full- Watched full-length full-length length in most recent session Note, too, that clips passed on by friends got the most attention inGender the survey. For professional content, that implies a viral quality that lends itself to sharing. While many marketers want to makeFemale 50% 52% 57%Male 50% 48% 43% their edgy or outrageous ads go viral, that cannot be controlled—Age only attempted.13-34 44% 64% 66% Amount of Attention Paid to Different Types of Video35-54 34% 27% 27% Content According to US Online Video Viewers,55+ 22% 9% 7% January 2009 (scale of 1-10*)Income Video clip shared by a friend 5.5<$75,000 69% 66% 71%$75,000+ 31% 34% 29% News highlights 5.4Note: n=1,013 ages 13+; *those who watch more than 1 hour of online Film trailer online 4.8video per weekSource: Veoh Networks, "Watching the Web: How Online Video Engages Video clip found on a video-sharing site 4.6Audiences" conducted by Forrester Consulting, October 8, 2008098737 www.eMarketer.com Music videos online 4.0098737 User-generated content online 3.9 Online ad 3.0“I’ve seen some really brilliant work on how Note: ages 16-64; *1=low attention and 10=very high attention they’re making UGC safe.” —Tracey Scheppach, Source: "Global Web Index" conducted by Lightspeed Research, May 28, 2009 senior vice president and video innovation director, 104110 www.eMarketer.com Starcom USA, in an interview with eMarketer, June 2009 104110 ® Marketing to the Online Video Audience 17
  • What People Watch (and Why) Where People Watch (and When)“If you’re talking about running prerolls in a Where people watch videos on the Web says a lot long list of user-generated content, then you about where marketers might want to place their want to know what you’re running in, because there is a very large range of topics, online video ad dollars. of editorial content for that and you don’t The number of video viewers at any single Website is one indicator necessarily want to be associated with of popularity. Counting heads for online video echoes the traditional everything in there.” —Sharon Gallacher, global ratings that Nielsen gives TV shows. However, as marketers have media director and managing director, Neo@Ogilvy, learned time and again, online traffic alone is a highly imperfect in an interview with eMarketer, July 2009 gauge of marketing effectiveness. A smaller, focused audience that spends time with professionally created videos is a better target forThe habit of online video snacking—a short clip here, another one brand marketers (who value engagement) than a broader audiencethere—creates basic problems for marketers wanting to reach the (that views many user-generated snippets).general video audience. Since most of the streams people vieware from 1 to 5 minutes long, that limits the space for commercial That said, 2009 data from both Nielsen Online and comScoremessages. And many short videos are not suited for most shows that far more Internet users visited YouTube each monthadvertisers, since user-generated content—nearly all of it short— than any other video destination. However, as is often the case,is a far less reliable vehicle for supporting brand messages. the figures between the two research firms vary because of differing methodologies. Nielsen, for example, includesThat said, one study shows marketers shifting their perspective progressive downloads but excludes video advertising, whileabout user-generated video. While 73% of advertisers told Collective comScore includes users at university locations, as well as homeMedia in 2008 that they would not run ads on user-generated video, and work, in its samples.that figure dropped by 10 percentage points in 2009. Such variances lead to further disparities. For example, whileTypes of Online Content on Which US Advertisers and Yahoo! is the second-largest video destination according tothe Clients of US Agencies Will Not Run Ads, 2008 & Nielsen’s research, it falls behind Microsoft and Fox Interactive2009 (% of respondents) Media (mainly MySpace) in comScore’s data.User-generated video 73% 63%Blogs 39% 35%Social media 27% 24%News 13% 10%Other0% 23% 2008 2009Note: 2008 n=200; 2009 n=417Source: Collective Media, "2009 Ad Network Study," provided to eMarketer,May 5, 2009103727 www.eMarketer.com103727 ® Marketing to the Online Video Audience 18
  • Where People Watch (and When)Perhaps more striking is the steady growth of the total online Not all data is disparate—comScore and Nielsen agree that in Julyvideo audience: 6.6% from February to July 2009, according to 2009, for instance, about 76% of unique video viewers visitedNielsen, or 9.1% according to comScore. YouTube (Google sites is nearly all YouTube, at this point).Unique Viewers at Top 10* Online Video Sites in the Beyond the largest video site, however, data from the two firms barelyUS, February-July 2009 (millions and % change**) matches up when measuring share of total audience. But most of the Feb Mar Apr May Jun Jul % same sites appear on both companies’ monthly top 10 lists: Hulu, change** Turner,Yahoo!, Microsoft, Fox and MTV (Viacom).That consistencyYouTube 88.1 89.4 83.7 95.4 99.0 104.5 18.6% indicates that despite the differing metrics, the mainstream onlineYahoo! 24.1 24.8 22.3 25.2 27.2 29.9 24.3% video audience can be readily found by marketers.MSN/Windows Live/Bing 12.2 12.1 11.8 12.5 16.1 17.8 45.8%Fox Interactive Media 14.4 14.7 14.1 16.0 16.0 14.7 2.2% Share of Unique Viewers at Top 10* Online Video SitesCNN Digital Network 8.4 9.0 9.1 - 10.9 11.7 39.4% in the US, February-July 2009 (% of total)Hulu 9.5 8.9 7.5 10.1 10.7 10.3 8.7% Feb Mar Apr May Jun JulTurner Sports and 6.0 5.8 5.9 6.8 7.7 7.9 33.0% YouTube 69.1% 68.7% 71.7% 71.3% 73.7% 76.9%Entertainment Digital Yahoo! 18.9% 19.0% 19.1% 18.9% 20.3% 22.0%Nickelodeon Kids and - 6.4 4.7 5.7 6.4 7.3 -Family Network MSN/Windows Live/Bing 9.6% 9.3% 10.1% 9.3% 12.0% 13.1%MTV Networks Music 4.4 6.3 6.6 6.7 9.3 6.9 5.7% Fox Interactive Media 11.3% 11.3% 12.1% 12.0% 11.9% 10.8%Blinkx - - - - - 0.3 - CNN Digital Network 6.6% 6.9% 7.8% - 8.1% 8.6%ABC.com 6.7 6.9 5.0 6.3 3.3 - - Hulu 7.4% 6.8% 6.4% 7.6% 8.0% 7.6%CBS Entertainment - - - 6.6 - - - Turner Sports and 4.7% 4.5% 5.0% 5.1% 5.7% 5.8%Network Entertainment DigitalTotal video viewers 127.6 130.1 116.7 133.8 134.3 136.0 6.6% Nickelodeon Kids and Family - 4.9% 4.0% 4.3% 4.8% 5.3% NetworkNote: includes progressive downloads and excludes video advertising;numbers do not add up to total because Internet users view videos at MTV Networks Music 3.5% 4.9% 5.7% 5.0% 6.9% 5.1%more than one site; *sites included in the top 10 and their rankings may Blinkx - - - - - 0.2%vary by month; **% change from February to July 2009Source: Nielsen Online, "VideoCensus" as cited in press releases, ABC.com 5.3% 5.3% 4.3% 4.7% 2.5% -March-August 2009; eMarketer calculations, September 2009 CBS Entertainment Network - - - - 5.0% -106660 www.eMarketer.com Note: includes progressive downloads and excludes video advertising;106660 monthly shares total more than 100% because Internet users view videos at more than one site; *sites included in the top 10 and their rankings may vary by monthUnique Viewers at Top 10* Online Video Properties in Source: Nielsen Online, "VideoCensus" as cited in press releases,the US, February-July 2009 (millions and % change**) March-August 2009; eMarketer calculations, September 2009 Feb Mar Apr May Jun Jul % 106661 www.eMarketer.com change** 106661Google sites 99.4 100.4 107.9 103.9 112.6 120.9 21.6%Microsoft sites 28.5 32.2 32.0 38.1 72.9 64.5 126.5% Share of Unique Viewers at Top 10* Online VideoFox Interactive Media 53.8 55.2 58.8 57.1 59.5 51.8 -3.7% Properties in the US, February-July 2009 (% of total)Yahoo! sites 41.7 42.5 45.4 44.2 50.3 47.4 13.6% Feb Mar Apr May Jun JulViacom Digital 22.1 27.2 34.6 25.0 40.1 42.4 91.9% Google sites 68.5% 67.2% 71.1% 69.1% 71.7% 76.3%Hulu 34.7 41.6 40.1 40.2 36.9 38.1 9.9% Microsoft sites 19.6% 21.6% 21.1% 25.3% 46.4% 40.7%Turner Network 20.1 19.6 34.2 28.7 52.1 35.7 77.5% Fox Interactive Media 37.1% 36.9% 38.8% 38.0% 37.9% 32.7%CBS Interactive 24.6 35.4 37.1 40.3 41.7 30.7 24.9% Yahoo! sites 28.7% 28.4% 29.9% 29.4% 32.0% 29.9%AOL 22.8 22.3 23.7 26.9 24.1 24.2 6.0% Viacom Digital 15.2% 18.2% 22.8% 16.6% 25.5% 26.8%Facebook - - 13.3 18.0 17.0 20.5 - Hulu 23.9% 27.8% 26.4% 26.7% 23.5% 24.1%Disney Online 12.7 13.0 - - - - - Turner Network 13.8% 13.1% 22.5% 19.1% 33.2% 22.5%Total video viewers 145.2 149.4 151.7 150.3 157.1 158.4 9.1% CBS Interactive 16.9% 23.7% 24.5% 26.8% 26.5% 19.4%Note: home, work and university locations; numbers do not add up to total AOL 15.7% 14.9% 15.6% 17.9% 15.3% 15.3%because Internet users view videos at more than one site; *sites included Facebook - - 8.8% 12.0% 10.8% 13.0%in the top 10 and their rankings may vary by month; **% change fromFebruary to July 2009 Disney Online 8.7% 8.7% - - - -Source: comScore Video Metrix as cited in press releases, March-August Note: home, work and university locations; monthly shares total more than2009; eMarketer calculations, September 2009 100% because Internet users view videos at more than one site; *sites106648 www.eMarketer.com included in the top 10 and their rankings may vary by month Source: comScore Video Metrix as cited in press releases, March-August106648 2009; eMarketer calculations, September 2009 106649 www.eMarketer.com 106649 ® Marketing to the Online Video Audience 19
  • Where People Watch (and When)How might the audience reach for a single popular show match up What’s more, the strong overall growth rate points to how onlinewith overall online video audience figures? In December 2008, video is still an emerging market with a broad base, as the number1.4 million Internet users viewed ABC’s “Lost,” the top-rated TV of videos streamed at sites outside the monthly top 10 alsonetwork show on the Web that month according to Nielsen Online. increased by over 21%.In fact, Nielsen found that for the same month, ABC.com rankedlast in the top 10 list, with 3.6 million unique viewers. That means Total Videos Streamed at Top 10* Online Video Sites in the US, February & July 2009 (millions and %one show alone attracted 39% of the site’s visitors. change**)The power of the TV program as a brand is an important marker February July % change**for companies looking toward online video advertising. YouTube 5,158.7 7,010.8 35.9% Hulu 308.8 383.8 24.3%Top 10 US Broadcast TV Network EntertainmentPrograms Viewed Online, Ranked by Unique Viewers, Yahoo! 250.4 265.6 6.0%December 2008 (thousands) MSN/Windows Live/Bing 162.9 188.0 15.4% Nickelodeon Kids and Family Network 209.5 179.7 -14.2%1. Lost (ABC) 1,425 Turner Sports and Entertainment Digital 125.1 155.1 24.0%2. Saturday Night Live (NBC) 1,111 Fox Interactive Media 194.3 151.6 -21.9%3. Greys Anatomy (ABC) 879 MTV Networks Music 100.1 119.1 19.0%4. Desperate Housewives (ABC) 723 CNN Digital Network 99.8 109.2 9.4% Blinkx - 86.4 -5. Heroes (NBC) 685 ABC.com 187.1 - -6. Ugly Betty (ABC) 631 CBS Entertainment Network - - -7. Samantha Who? (ABC) 560 Other sites 2,101.2 2,550.9 21.4%8. Scrubs (ABC) 519 Total streams 8,897.9 11,200.1 25.9%9. Survivor (CBS) 496 Note: includes progressive downloads and excludes video advertising; *sites included in the top 10 and their rankings may vary by month; **% 10. True Beauty (ABC) 462 change from February to July 2009 Source: Nielsen Online, "VideoCensus" as cited in press releases,Note: reflects video content on ABC.com, CBS Television, CWTV.com, FOX March-August 2009; eMarketer calculations, September 2009Broadcasting and NBC.com, including their respective embedded video 106656 www.eMarketer.complayers; programs are client-defined 106656Source: Nielsen Online, "VideoCensus" as cited in press release, February12, 2009 The comScore data paints a vastly different picture, with nearly101708 www.eMarketer.com 21.4 billion total streams in July 2009 versus Nielsen’s 11.2 billion101708 figure. The total growth rate for all US video sites is also far larger,The number of videos streamed at each site is more useful than at 63.5% from February to July—as are nearly all the individualsheer traffic, since each video potentially gives marketers an video site growth rates.opportunity to advertise.Notably, the number of video streams at YouTube grew by 35.9%from February to July 2009, according to Nielsen, or 10 percentagepoints more than the 25.9% growth for total streams. It’s rarewhen the largest company has the greatest growth rate, too. ® Marketing to the Online Video Audience 20
  • Where People Watch (and When)Note that the comScore data combines multiple sites into a Still, when it comes to viewing professionally made content, 63%corporate property, such as Viacom Digital, which grew by over of Internet users who accessed full TV content in 2008 went227%. In contrast, Nielsen breaks down the individual sites, such directly to the network sites, according to Knowledge Networks.as Nickelodeon, MTV Music and so forth. Only 28% used third-party sites such as Hulu.Total Videos Viewed at Top 10* Online Video Methods Used by US Internet Users to Stream TVProperties in the US, February & July 2009 (millions Network Content, by Age, 2006 & 2008 (% ofand % change**) respondents*) February July % 13-54 13-17 18-34 35-49 50-54 change** 2006Google sites 5,348.6 8,953.9 67.4% Use TV network 61% 56% 61% 65% 53%Viacom Digital 248.1 812.3 227.4% Websites to viewMicrosoft sites 259.0 630.6 143.5% videoFox Interactive Media 462.6 558.5 20.7% Use third-party 16% 27% 15% 12% 8% video sites toHulu 332.5 457.0 37.4% view networkTurner Network 179.5 390.8 130.6% videoYahoo! sites 353.5 374.7 6.0% 2008Disney Online 116.1 169.8 46.2% Use TV network 63% 51% 68% 64% 53% Websites to viewCBS Interactive 111.8 150.2 34.3% videoAOL 117.1 - - Use third-party 28% 26% 30% 26% 32%Blinkx - - - video sites to view networkABC.com - 137.8 - videoOthers 5,553.4 8,735.6 57.3% Note: *among those who access full TV programs onlineTotal videos viewed 13,072.2 21,371.3 63.5% Source: Knowledge Networks Inc., "How People Use TVs Web Connections" as cited in press release, February 12, 2009Note: home, work and university locations; *sites included in the top 10 101751 www.eMarketer.comand their rankings may vary by month; **% change from February to July2009 101751Source: comScore Video Metrix as cited in press releases, March-August2009; eMarketer calculations, September 2009 When you derive the average number of videos each visitor views106653 www.eMarketer.com on any site—calculated from total videos and unique traffic106653 figures—you begin to get the clearest picture yet of how usefulAmong all the top video sites, Hulu’s growth is particularly that site might be for video advertising.noteworthy—not just for its usage but more for the audienceawareness.As the largest third-party site for professionally made Blinkx, a video search engine, is an anomaly in July 2009. And whilevideo, Hulu promises to become an even bigger player for online YouTube continues at a high level of usage, the four sites below itvideo advertising. Ranked by number of videos viewed, it is fifth in in the Nielsen data represent a sweet spot for advertisers:the comScore data for July 2009 and second in the Nielsen research. professional content only, blended with an active audience.Further, the audience’s response in the Ipsos survey showed a Among all four of those sites—Hulu, Nickelodeon, Turner Sportssharp increase in the video site’s own brand awareness. While and MTV Music—marketers can find both long-form and shortonly 9% of respondents in the ongoing study had heard of Hulu in videos, a wide range of ages and genders, and varied types ofSeptember 2008, by April 2009 that figure had soared to 41%. content to appeal to different audiences.US Online Video Viewers’ Awareness and Usage* ofSelect Digital Video Providers, September 2008 &April 2009 (% of respondents) Awareness Usage* September 2008 April 2009 September 2008 April 2009YouTube 83% 87% 49% 56%iTunes Store 46% 49% 8% 10%MySpace 54% 46% 13% 9%Hulu 9% 41% 3% 14%Note: September 2008 n=1,102; April 2009 n=939; ages 12+; *in past 30daysSource: Ipsos MediaCT, "MOTION study," September 9, 2009106713 www.eMarketer.com106713 ® Marketing to the Online Video Audience 21
  • Where People Watch (and When)Notable, too, is how the growth rates for Microsoft, Yahoo! and Based on average videos per viewer, the rankings from comScoreMySpace (Fox Interactive Media) showed declining usage over the are essentially in accord with Nielsen’s. That is, YouTube gets thesix-month period. As the online video audience grows more most usage per person, followed by a mix of Viacom (MTV andfamiliar with offerings, it appears to be gravitating directly toward Nickelodeon), Hulu and Turner.various TV network sites, as well as Hulu. Average Videos per Viewer at Top 10* Online Video Properties in the US, February-July 2009Average Streams per Viewer at Top 10* Online VideoSites in the US, February-July 2009 Feb Mar Apr May Jun Jul % change** Feb Mar Apr May Jun Jul % change** Google sites 53.8 59.0 63.3 63.6 67.8 74.1 37.7%Blinkx - - - - - Viacom Digital 11.3 10.2 9.1 11.2 19.3 19.2 69.9% 322.4 -YouTube Hulu 9.6 9.1 9.9 10.2 10.1 12.0 25.0% 58.5 61.3 65.6 63.4 62.0 67.1 14.6% Turner Network 8.4 8.5 8.0 9.1 9.5 11.0 31.0%Hulu 32.6 39.3 50.1 37.8 32.6 37.3 14.3% Fox Interactive Media 8.6 7.9 8.7 10.1 10.1 10.8 25.6%Nickelodeon Kids and - 30.7 37.5 26.9 24.4 24.8 -Family Network Microsoft sites 9.1 9.0 9.0 8.1 9.5 9.8 7.7%Turner Sports and 21.0 23.6 22.3 20.6 19.5 19.6 -6.8% Yahoo! sites 8.5 7.9 7.8 7.1 7.4 7.9 -7.1%Entertainment Digital AOL 5.1 4.7 5.1 5.9 5.6 5.2 2.0%MTV Networks Music 22.7 19.5 21.7 18.9 14.8 17.3 -23.8% CBS Interactive 4.5 5.4 5.5 5.2 4.7 4.9 8.9%MSN/Windows Live/Bing 13.4 14.0 14.0 11.9 12.1 10.6 -20.9% Facebook - - 3.3 4.0 4.0 4.0 -Fox Interactive Media 13.5 14.1 14.3 11.9 10.4 10.3 -23.6% Disney Online 9.1 9.7 - - - - -CNN Digital Network 11.9 11.5 12.4 - 9.5 9.4 -21.5% Total videos per 90.0 96.8 110.7 109.8 124.1 134.9 49.9%Yahoo! 10.4 9.4 9.1 8.3 8.6 8.9 -14.7% viewerABC.com 27.9 25.7 29.6 27.8 23.8 - - Note: home, work and university locations; *sites included in the top 10 and their rankings may vary by month; **% change from February to JulyCBS Entertainment - - - 14.8 - - - 2009Network Source: comScore Video Metrix as cited in press releases, March-August 2009; eMarketer calculations, September 2009Total streams per 69.7 74.4 81.0 75.1 75.1 82.4 18.1%viewer 106650 www.eMarketer.com 106650Note: includes progressive downloads and excludes video advertising;*sites included in the top 10 and their rankings may vary by month; **%change from February to July 2009 When People WatchSource: Nielsen Online, "VideoCensus" as cited in press releases,March-August 2009; eMarketer calculations, September 2009 For companies looking for specific markets, daypart targeting for106665 www.eMarketer.com video advertising appears to make sense. Data from comScore106665 shows the peak viewing time in June 2009 was weekday daytime, with 27.3% of the total online video audience. Share of Time that US Internet Users Spend Viewing Online Video, by Time of Day/Week, June 2008 vs. June 2009 (% of total and % change) June 2008 June 2009 % change Early morning (M-F, 7am-10am) 6.0% 7.1% 18.8% Daytime (M-F, 10am-5pm) 28.0% 27.3% -2.3% Early evening (M-F, 5pm-8pm) 12.0% 11.3% -5.6% Evening (M-F, 8pm-11pm) 11.8% 11.2% -5.5% Late evening (M-F, 11pm-1am) 6.3% 7.3% 14.8% Late night (M-F, 1am-7am) 7.6% 10.2% 33.7% Weekday, all day 71.7% 74.4% 3.7% Morning, weekend 5.4% 4.7% -12.8% Afternoon, weekend 8.1% 7.6% -5.2% Evening, weekend 7.8% 5.8% -25.2% Late evening, weekend 3.1% 2.9% -4.8% Late night, weekend 4.0% 4.5% 14.0% Weekend, all day 28.3% 25.6% -9.5% Total 100.0% 100.0% 0.0% Source: comScore as cited by Advertising Age, September 2009; eMarketer calculations, September 2009 106679 www.eMarketer.com 106679 ® Marketing to the Online Video Audience 22
  • Where People Watch (and When) Who Watches (and How)However, the greatest growth in time spent watching was also on The 144 million people in the US who will watchweekdays, but during late night (at 205%), early morning (171%)and late evening (162%). online video in 2009 represent 72% of Internet users and 47% of the total population. By 2013,The night and evening slots tend to be more relaxed times formost individuals, which potentially means the growth of long-form those numbers will shift to 188 million, or 85%professional content online can be accompanied by ads and 59%, respectively. By any standard, thedaypart-targeted to those time slots. audience has not only reached critical mass, butAmount of Time that US Internet Users Spend is still sharply on the rise.Viewing Online Video, by Time of Day/Week, June2008 vs. June 2009 (billions of minutes and % change) US Online Video Viewers and Penetration, 2008-2013 June 2008 June 2009 % change 2008 2009 2010 2011 2012 2013Early morning (M-F, 7am-10am) 1.86 5.05 171% Online video viewers (millions) 135 144 154 165 177 188Daytime (M-F, 10am-5pm) 8.72 19.45 123% % of Internet users 70% 72% 75% 78% 82% 85%Early evening (M-F, 5pm-8pm) 3.73 8.05 116% % of population 44% 47% 50% 53% 56% 59%Evening (M-F, 8pm-11pm) 3.69 7.96 116% Note: individuals who download or stream video at least once per monthLate evening (M-F, 11pm-1am) 1.97 5.17 162% Source: eMarketer, July 2009Late night (M-F, 1am-7am) 2.38 7.28 205% 105370 www.eMarketer.comWeekday, all day 22.35 52.96 137% 105370Morning, weekend 1.69 3.36 99% For additional information on the above chart, seeAfternoon, weekend 2.51 5.44 116% Endnote 105370 in the Endnotes section.Evening, weekend 2.43 4.15 71%Late evening, weekend 0.96 2.08 117%Late night, weekend 1.23 3.21 160% Research from Deloitte matches up with common perceptions, too,Weekend, all day 8.82 18.24 107% with a higher percentage of younger Internet users inTotal 31.17 71.19 128% September–October 2008 watching videos weekly than older users.Source: comScore as cited by Advertising Age, September 2009; eMarketercalculations, September 2009 Weekly Online Video Watching Activities of US106678 www.eMarketer.com Internet Users, by Generation, October 2008 (% of106678 respondents in each group) Millennials (14-25) 67% 49% Generation X (26-42) 62% 47% Boomers (43-61) 40% 27% Matures (62-75) 26% 18% Watch movies and other videos Watch TV shows Note: use frequently/occasionally Source: Deloitte, “State of the Media Democracy Third Edition," provided to eMarketer, January 12, 2009 105582 www.eMarketer.com 105582 ® Marketing to the Online Video Audience 23
  • Who Watches (and How)However, the common perception that active viewing of online In a comparative estimate of how many Internet users watchvideo is almost only among a younger audience is off-target. An video or how often, the higher numbers range from Nielsen’s 76%ongoing study of this audience by Ipsos MediaCT found that in June who watched video on the Internet in Q4 2008, to eMarketer’s 72%2008, 60% of those ages 35 to 54 had watched video in the previous share, to the 62% in January 2009 who told Lightspeed Research30 days. The only other group with a greater share was teens. that they watched one or more videos in the previous week.Demographic Profile of US Online Video Viewers*, At the lower end, 23% watched online video (MediaMarkDecember 2007 & June 2008 (% of respondents in Research) or viewed longer video content (Ofcom/Synovate),each group) down to the 12% of respondents in the Magid/Metacafe survey December 2007 June 2008 who watched videos daily in April 2009.GenderMale 55% 58% With comparative estimate percentages as in this chart,Female 45% 54% definitions are central. For example, is the researcher measuringAge Internet users in general, video watchers in particular or12-17 73% 71% consumers overall? Or is the researcher gauging particular types18-24 59% 58% of video viewing, such as just TV shows and other professional25-34 52% 60% content? Further, the varied timeframes—from September 200835-54 49% 60% through 2009—also contribute to the broad spread of numbers.55+ 32% 38%Note: ages 12+; *in the past 30 daysSource: Ipsos MediaCT, "Motion Study" as cited in press release, October27, 2008099157 www.eMarketer.com099157Another perspective, this from the Veoh/Forrester study, breaksdown video viewers not as a percentage of each age, but whatages make up the entire active online video audience. In this study,“active” refers to those who watch more than 1 hour of onlinevideo each week.By that standard, the age skew is lower, as common wisdomwould have it, with 57% of the total ages 13 to 34.Demographic Profile of US Active* Online VideoViewers, by Segment, August 2008 (% of respondents) Watchers Controllers Connectors TotalGenderFemale 50% 51% 53% 51%Male 50% 49% 47% 49%Age13-34 55% 58% 60% 57%35-54 31% 30% 28% 30%55+ 15% 12% 13% 13%Income<$75,000 63% 66% 71% 66%$75,000+ 37% 34% 29% 34%Note: n=415 (watchers); n=397 (controllers); n=193 (connectors); ages 13+;*those who watch more than 1 hour of online video per weekSource: Veoh Networks, "Watching the Web: How Online Video EngagesAudiences" conducted by Forrester Consulting, October 8, 2008098732 www.eMarketer.com098732But just because the numbers are there does not make it easy formarketers to reach the online video audience. It is not even easyto accurately gauge the size of the audience. ® Marketing to the Online Video Audience 24
  • Who Watches (and How)Nevertheless, the wide span of percentages indicates how This split will likely narrow as the increase of professional videodetermining the size and usage patterns of this audience is still at content available on the Web attracts a portion of that lower-usea toddler’s level. segment and ups usage among those already watching online video.Comparative Estimates: Frequency/Usage of Online Frequency with Which US Internet Users WatchVideo Among US Internet Users, 2008 & 2009 (% of Online Video, April 2009 (% of respondents)respondents) Frequency/ % of Age Survey Daily 12% usage respon- date dents Several times per week 19%The Nielsen Company, Watched video 76%* 2+ Q4 2008 Once per week 12%February 2009 on Internet Once per month or more 10%eMarketer, July Download or 72%** all 2009 Less than once per month 15%2009 stream video at ages least once per Never 33% monthLightspeed Research, Viewed one or 62% 16-64 January Note: n=1,927 ages 12-64; numbers may not add up to 100% due toMay 2009 more videos 2009 rounding in past week Source: Frank N. Magid Associates, "Magid Media Futures 2009: Opportunities in Online Video" sponsored by Metacafe, July 7, 2009Ipsos MediaCT, Streamed video 57% 12+ September 105278 www.eMarketer.comDecember 2008 in the past 30 days 2008 105278Deloitte, January Watch movies and 52% 14-75 20082009 other videos weekly No matter what the age or gender, people spent more timeMetacafe & Frank N. Watch videos 43% 12-64 April viewing video on the Web in April 2009 than only six monthsMagid Associates, weekly 2009July 2009 earlier, according to Nielsen Online. In fact, the greatest increase inDeloitte, January Watch TV shows 37% 14-75 2008 average minutes viewed per person, at 29%, came in the 35 to 492009 weekly age bracket.Arbitron & Edison Viewed video 27%*** 12+ 2009Media Research, in the past week When you consider this group grew up during the time thatApril 2009 cable TV became a major force among media, it is notMediamark Watched online 23% 18+ SeptemberResearch, video in past 30 2007- surprising that they are increasingly gravitating to online’sNovember 2008 days October 2008 video-on-demand environment.Ofcom-UK & Watch/download 23% 18-64 OctoberSynovate, longer video content, 2008November 2008 e.g., feature films Average Time Spent Viewing Online Video Among US or complete TV Internet Users, by Age and Gender, November 2008 & programs April 2009 (minutes per viewer and % change)Ipsos MediaCT, Downloaded video 22% 12+ September November April %December 2008 file in past 30 days 2008 2008 2009 changeMetacafe & Frank N. Watch videos 12% 12-64 July GenderMagid Associates, daily 2009July 2009 Male 209 249 19%Note: *not survey data; eMarketer calculations based on rounded figures Female 151 170 12%from Nielsen; **not survey data; eMarketer estimate; ***among total US Ageconsumers, not just Internet usersSource: eMarketer, July 2009; various, as noted, 2008 & 2009 2-11 113 116 3%105581 www.eMarketer.com 12-17 178 190 7% 18-24 303 349 15% 25-34 253 296 17%For additional information on the above chart, see 35-49 187 243 29%Endnote 105581 in the Endnotes section. 50-64 122 139 14% 65+ 67 81 21%Frequency and Time Total 178 206 16%There is a sharp division between regular video viewers and Note: home and work locations Source: Nielsen Online, "VideoCensus" as cited in press release, May 14,sporadic or non-users. According to Magid/Metacafe, 43% of 2009Internet users watch online video once per week or more often, 104094 www.eMarketer.comwhile 48% watch less than once per month or never. 104094 ® Marketing to the Online Video Audience 25
  • Who Watches (and How)Further Nielsen data reinforces that trend toward overall higher Note, though, that this data looks at all US consumers, not justusage. While the number of unique viewers grew by only 6.6% Internet users. But for marketers, all consumers are potentialfrom February to July 2009, consider these other growth rates for targets for their products—and for broad reach alone, they are stillthe same period: best reached via TV.■ 25.9% for total streams viewed Share of Total Time US Consumers Spend per Month Viewing Video on TV, Internet and Mobile Phone, Q1■ 25.0% for average time per viewer 2008-Q2 2009 (% of total)■ 33.2% for total time spent watching videos among all unique viewers Q1 Q2 Q3 Q4 Q1 Q2 2008 2008 2008 2008 2009 2009 Watching TV in the home 99.3% 99.0% 98.9% 98.8% 98.6% 98.5%US Online Video Viewer Metrics, February-July 2009 Watching timeshifted TV 0.8% 1.0% 1.1% 1.2% 1.5% 1.5% Feb Mar Apr May Jun Jul % change** Watching video on Internet 0.5% 0.7% 0.8% 0.8% 0.9% 1.0%Unique viewers (millions) 127.6 130.1 116.7 133.8 134.3 136.0 6.6% Mobile subscribers watching - 0.1% 0.1% 0.1% 0.1% 0.1% video on a mobile phoneTotal streams (billions) 8.90 9.67 9.45 10.04 10.08 11.20 25.9% Note: total time calculated by multiplying reach for each medium byAverage streams per 69.7 74.4 81.0 75.1 75.1 82.4 18.2% average hours per month; total is greater than 100% becauseviewer approximately 75% of timeshifted TV is also counted under TV in the homeAverage time spent per 169.3 190.7 205.7 188.7 188.8 211.6 25.0% Source: The Nielsen Company, "A2/M2 Three Screen Report," February,viewer (minutes) May and September 2009; eMarketer calculations, September 2009 106716 www.eMarketer.comAverage time per stream 2.43 2.56 2.54 2.51 2.52 2.57 5.8%(minutes) 106716Total time spent (millions 360.1 413.4 400.1 420.8 422.6 479.5 33.2%of hours) “If people actually watched more online video,Note: includes progressive downloads and excludes video advertising;*sites included in the top 10 and their rankings may vary by month; **% then it would be bigger. And they’re notchange from February to July 2009 watching that much of it—it’s just not thatSource: Nielsen Online, "VideoCensus" as cited in press releases,March-August 2009; eMarketer calculations, September 2009 big.” —Brian Wieser, SVP global director of forecasting,106668 www.eMarketer.com MAGNA, in an interview with eMarketer, June 2009106668Even with the large online gains, the amount of time people spend At this point, a significant minority of people—20% according towatching video on the Web pales compared with TV time. the Magid/Metacafe study—are reducing their TV-watching habitsWhen the total time spent watching video is divvied up among the due to the availability of online video.three screens—television, Internet and mobile—online video (not Change in Time Spent Watching TV due to Onlineto mention mobile) seems like a rounding error. As recently as Q2 Video According to US Online Video Viewers, April2009, according to Nielsen, only 1% of total video time occurred at 2009 (% of respondents)a computer, while 98.5% was spent in front of a TV. More 9% The same amount 64% Less 20% Dont spend any time doing that activity 7% Note: n=1,279 ages 12-64 Source: Frank N. Magid Associates, "Magid Media Futures 2009: Opportunities in Online Video" sponsored by Metacafe, July 7, 2009 105286 www.eMarketer.com 105286 ® Marketing to the Online Video Audience 26
  • Who Watches (and How) ConclusionsEven as online video consumes a bare percentage of total time, The potential audience for online videoNielsen found that the annual growth rate hit 62.7% in Q2 2009, asimilar figure to its conceptual cousin, timeshifted TV through a advertising does not much trust the ads—andDVR (both allow the audience to watch when they want). In only about one-third actively enjoys them. Socontrast, watching TV in the home inched up by only 2.4% during what’s the ad industry to do?that same quarter. For some the solution is same old, same old—simply pushing videoTotal Time US Consumers Spend per Month ViewingVideo on TV, Internet and Mobile Phone, Q4 2008-Q2 commercials much like on TV, and trusting that the combination of2009 (% change*) frequency and captive audience will get the message across. For a Q4 Q1 Q2 substantial slice of advertisers, that method will actually be 2008 2009 2009 relatively effective in the interactive space—if perhaps costly.Watching TV in the home 5.0% 3.1% 2.4%Watching timeshifted TV 82.4% 92.3% 57.9% However, marketers should consider these takeaways:Using the Internet 7.0% 8.0% 18.4% ■ Only 1% of total video viewing time goes to Web video. ToWatching video on Internet - 73.9% 62.7% reach the online video audience, marketers will need to payMobile subscribers watching video - - 52.4%on a mobile phone attention not only to sheer audience numbers but to how peopleTotal 6.2% 4.2% 4.5% interact with video.Note: total time calculated by multiplying reach for each medium by ■ There are multiple points of disconnect between the TVaverage hours per month; *change from average month in quarter vs.average month in same quarter of prior year audience and the online video audience. They are not oneSource: The Nielsen Company, "A2/M2 Three Screen Report," February,May and September 2009; eMarketer calculations, September 2009 and the same—the Internet audience does not necessarily106718 www.eMarketer.com respond to the same ads in the same way they would after106718 viewing them on TV. Therefore, developing ad creative just forHowever, the relatively low growth rate for time spent watching TV Internet video will give marketers a competitive edge.in the home belies the actual hourly increase. From Q2 2008 to Q22009, the total hours US consumers spent on that activity ■ The audience has not displayed a definite preference forincreased by 951 million. Even with its rapid growth, the total types of video ads. Marketers, then, should continue tohours for online video increased by only 164 million. experiment with different video ad formats or combine them with other types of ads.With such changes, it is hard to picture online video topplingtelevision usage anytime soon. ■ The audience is mixed about free-or-fee revenue models. There is no absolute consensus on ad-supported video contentTotal Time US Consumers Spend per Month Viewing versus some form of payment to avoid advertising altogether orVideo on TV, Internet and Mobile Phone, Q1 2008-Q2 even just reduce it. If the value of video content is high enough,2009 (millions of hours) marketers and content providers together can attract a large Q1 Q2 Q3 Q4 Q1 Q2 2008 2008 2008 2008 2009 2009 audience through a fusion of fewer ads (less intrusive) and lowerWatching TV in the home 42,344 39,163 39,746 43,097 43,668 40,114 fees (less prohibitive).Watching timeshifted TV 340 379 436 531 653 598Using the Internet 4,416 4,237 4,370 4,372 4,771 5,015 For more information about online video advertising,Watching video on Internet 226 262 303 355 393 426 see eMarketer’s previous report in this series,Mobile subscribers - 33 37 41 49 50 “Digital Video Advertising: Where’s the Money?”watching video on amobile phoneTotal 47,071 43,789 44,565 47,998 49,044 45,754Note: total time calculated by multiplying reach for each medium byaverage hours per month; total line is less than sum of individualcategories because approximately 75% of timeshifted TV is also countedunder TV in the homeSource: The Nielsen Company, "A2/M2 Three Screen Report," February,May and September 2009; eMarketer calculations, September 2009106715 www.eMarketer.com106715 ® Marketing to the Online Video Audience 27
  • EndnotesEndnote numbers correspond to the unique Attitudes Toward In-Video Ads Among US Active* Online Video Viewers, by Segment, August 2008 (% ofsix-digit identifier in the lower left-hand corner respondents)of each chart. The charts from the report are In-video ads are annoyingrepeated before their respective endnotes. 61% 59% 58%098734 | 098735 In-video ads are fair as they help pay for online video services 41%Ad Responses of US Active* Online Video Viewers 37%During Their Most Recent Online Video Site Visit, by 34%Segment, August 2008 (% of respondents) I avoid Websites that use in-video advertisingNoticed the product or brand that was advertised during myvideo viewing experience 19% 48% 21% 34% 23% 34% In-video ads are useful when they feature something I am interested inClicked on an ad and registered for a sweepstakes or giveaway 28% 12% 19% 3% 19% 4% In-video ads can be entertainingClicked on an ad that was part of or next to a video I waswatching and learned more about the product or service 23% 9% 17% 3% 10% 5% Connectors Controllers WatchersClicked on an ad and signed up for more information Note: n=415 (watchers); n=397 (controllers); n=193 (connectors); ages 13+; 6% *those who watch more than 1 hour of online video per week Source: Veoh Networks, "Watching the Web: How Online Video Engages 3% Audiences" conducted by Forrester Consulting, October 8, 2008 2% 098735 www.eMarketer.comPurchased a product 098735 4% Extended Note: "Watchers" spend a little more than an hour 2% watching video each week but besides showing up to watch, do 2% not engage the experience deeply by controlling playback or Connectors Controllers Watchers sharing videos. "Controllers" are younger viewers who take anNote: n=415 (watchers); n=397 (controllers); n=193 (connectors); ages 13+; active role in controlling their video experiences and feel that*those who watch more than 1 hour of online video per week online video is important in their lives. "Connectors" are typicallySource: Veoh Networks, "Watching the Web: How Online Video EngagesAudiences" conducted by Forrester Consulting, October 8, 2008 even younger and, representing just 7% of online viewers,098734 www.eMarketer.com consume 20% of all online video and are responsible for 42% of all098734 the online video-sharing. ® Marketing to the Online Video Audience 28
  • Endnotes099240 105581Online Advertising Formats Preferred by US Comparative Estimates: Frequency/Usage of OnlineConnected Consumers, June 2008 (% of respondents) Video Among US Internet Users, 2008 & 2009 (% of respondents)Banner ads on same page 44.44% Frequency/ % of Age Survey usage respon- datePreroll 33.63% dentsInterstitials 13.10% The Nielsen Company, Watched video 76%* 2+ Q4 2008 February 2009 on InternetTickers 8.83%Source: Razorfish, "Digital Consumer Behavior Study" as cited in "FEED: eMarketer, July Download or 72%** all 2009The Razorfish Consumer Experience Report," October 2008 2009 stream video at ages least once per099240 www.eMarketer.com month099240 Lightspeed Research, Viewed one or 62% 16-64 JanuaryExtended Note: "Connected consumers" are Internet users with May 2009 more videos 2009 in past weekaccess to broadband who spent $200 online in the past year Ipsos MediaCT, Streamed video 57% 12+ September(travel, Netflix, tickets, Amazon gifts, etc.); visited a "community December 2008 in the past 30 days 2008site" (MySpace, YouTube, Facebook, Classmates, Wikipedia, etc.); Deloitte, January Watch movies and 52% 14-75 2008and consumed or created some form of digital media, such as 2009 other videos weeklyphotos, videos, music or news. Metacafe & Frank N. Watch videos 43% 12-64 April Magid Associates, weekly 2009 July 2009105370 Deloitte, January Watch TV shows 37% 14-75 2008 2009 weekly Arbitron & Edison Viewed video 27%*** 12+ 2009US Online Video Viewers and Penetration, 2008-2013 Media Research, in the past week 2008 2009 2010 2011 2012 2013 April 2009Online video viewers (millions) 135 144 154 165 177 188 Mediamark Watched online 23% 18+ September Research, video in past 30 2007-% of Internet users 70% 72% 75% 78% 82% 85% November 2008 days October 2008% of population 44% 47% 50% 53% 56% 59% Ofcom-UK & Watch/download 23% 18-64 October Synovate, longer video content, 2008Note: individuals who download or stream video at least once per month November 2008 e.g., feature filmsSource: eMarketer, July 2009 or complete TV105370 www.eMarketer.com programs105370 Ipsos MediaCT, Downloaded video 22% 12+ SeptemberExtended Note: eMarketer defines an Internet user as a person December 2008 file in past 30 days 2008of any age who uses the Internet from any location at least once Metacafe & Frank N. Watch videos 12% 12-64 July Magid Associates, daily 2009per month. Population estimates used to calculate penetration July 2009rate are based on US Census Bureau data. Note: *not survey data; eMarketer calculations based on rounded figures from Nielsen; **not survey data; eMarketer estimate; ***among total US consumers, not just Internet users Source: eMarketer, July 2009; various, as noted, 2008 & 2009 105581 www.eMarketer.com 105581 Citation: Arbitron and Edison Media Research, "The Infinite Dial 2009" sponsored by TargetSpot, April 16, 2009; Deloitte, "State of the Media Democracy Third Edition," provided to eMarketer, January 12, 2009; Frank N. Magid Associates, "Magid Media Futures 2009: Opportunities in Online Video" sponsored by Metacafe, July 7, 2009; Ipsos MediaCT, "Motion" as cited in press release, December 18, 2008; "Global Web Index" conducted by Lightspeed Research, May 28, 2009 with eMarketer calculations; Mediamark Research Inc. (MRI), "Survey of the American Consumer, Fall 2008" as cited in press release, November 20, 2008; Office of Communications (Ofcom) - UK, "The International Communications Market 2008” conducted by Synovate, November 20, 2008; The Nielsen Company, "A2/M2 Three Screen Report - 4th Quarter 2008," February 23, 2009 with eMarketer calculations ® Marketing to the Online Video Audience 29
  • Endnotes106674 | 106676 | 106669 Brand Metrics for US Online Video Advertising Campaigns on MTV Networks, by Type of Ad,US Internet Users’ Attitudes Regarding Online Video January-April 2009 (% of respondents)Advertising Campaigns on MTV Networks, by Type of Control 5-second 5-second 30-secondAd, January-April 2009 (% of respondents*) preroll preroll preroll 5-second 5-second 30- + + preroll preroll second lower 1/3 sideloader + + preroll Unaided awareness 12.6% 22.9% 17.6% 19.8% lower 1/3 sideloader Aided awareness 72.9% 81.0% 79.4% 81.7%More intrusive than other ad formats 24.7% 29.2% 30.0% Online ad awareness 29.2% 56.2% 56.1% 47.5%Liked that it didn’t interrupt the video 64.5% 57.9% 61.8% Purchase intent 41.4% 44.2% 36.3% 37.9%An ad I would stop and look at 35.0% 35.2% 42.2% Note: n=2,306 (control); n=403 (5-second preroll + lower 1/3); n=427The way the ad was delivered was cool 44.1% 43.2% 45.7% (5-second preroll + sideloader); n=353 (30-second preroll) Source: MTV Networks, "Project Inform" conducted by InsightExpress, JulyAn ad I would click on or interact with 23.4% 25.1% 25.1% 2009; eMarketer calculations, September 2009Length of the ad was appropriate 61.0% 60.5% 63.1% 106669 www.eMarketer.comAd was short and let me get to my 68.4% 64.2% 58.6% 106669video quickly Extended Note: In the campaigns, there were three types of ads:An ad I’d like to see again 24.6% 26.5% 29.8% preroll (5-second and 30-second), lower 1/3 (semitransparentNote: n=403 (5-second preroll + lower 1/3); n=427 (5-second preroll + overlay that launches from the bottom third of the video screensideloader); n=353 (30-second preroll); *respondents who answered“agree” or “strongly agree” on 5-point scale approximately 10 seconds after video content begins), andSource: MTV Networks, "Project Inform" conducted by InsightExpress, July2009 sideloader (custom unit that slides out of the right-hand side of the106674 www.eMarketer.com video screen approximately 10 seconds after video content106674 begins). Video ads were from three companies (movie studio, beauty care, CPG) and were measured over 50 million impressionsUS Internet Users Who Liked Elements of OnlineVideo Advertising Campaigns on MTV Networks, by across five sites (MTV, VH1, CMT, Comedy Central and Nick Jr).Type of Ad, January-April 2009 (% of respondents*) 5-second 5-second 30- 106682 preroll preroll second + + preroll lower 1/3 sideloader Average Time Spent on Online Advertising AmongAnimation or motion of the ad 38.8% 39.8% 40.4% Internet Users in the US and Canada, 2008Movement of ad across the screen 32.4% 37.9% 30.9% Dwell rate* Average dwell timeHow the ad appears and then disappears 43.9% 47.9% 38.5% (seconds)Ability to expand the ad 31.7% 33.9% 29.4% With video 7.53% 85.16Ability to click a link in the ad 36.4% 38.8% 30.9% No video 5.56% 32.73Ability to see a longer video ad with a 34.2% 36.3% 29.5% General 6.54% 57.58click Note: excludes messenger ads; *cumulative instances of where a userNote: n=403 (5-second preroll + lower 1/3); n=427 (5-second preroll + interacted with the ad divided by served impressionssideloader); n=353 (30-second preroll); *respondents who answered Source: Eyeblaster, "Trends of Time and Attention in Online Advertising,"“agree” or “strongly agree” on 5-point scale provided to eMarketer, July 22, 2009Source: MTV Networks, "Project Inform" conducted by InsightExpress, July 106682 www.eMarketer.com2009 106682106676 www.eMarketer.com106676 Extended Note: Dwell time (time spent) is defined as the average number of seconds consumers spend engaging with an online ad, which includes the amount of time the mouse was over an ad, user-initiated video duration, user-initiated expansion duration and other user-initiated custom interaction duration. Unintentional dwell instances of less than 1 second are excluded. ® Marketing to the Online Video Audience 30
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