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David Hallerman | eMarketer | State of the Online Video Market: Big Growth Ahead


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eMarketer Principal Analyst David Hallerman presentation titled "State of the Online Video Market: Big Growth Ahead." Presented at the VideoNuze 2012 Online Video Advertising Summit, June 19, 2012, NYC.

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David Hallerman | eMarketer | State of the Online Video Market: Big Growth Ahead

  1. 1. VIDEONUZEONLINE VIDEOADVERTISINGSUMMITJ U N E 1 9, 2 0 1 2 State of the Online Video Market: Big Growth Ahead (but let’s keep perspective…)David HallermanPrincipal Analyst ©2012 eMarketer Inc.
  2. 2. How big will the digital video ad marketreally become over next few years?
  3. 3. Online videoadvertisinggrowth ratesmight peakthis year andthen slowdown, butspendingwill doublein two years ©2012 eMarketer Inc.
  4. 4. Video adspendinggains willcome in partfrom theshiftingdisplay adcategory ©2012 eMarketer Inc.
  5. 5. Online videoad spendingwill grow farfaster thanTV spending,but growthalone can besomewhatdeceptive ©2012 eMarketer Inc.
  6. 6. While onlinegrowth ratesbeat out TV,$4.1 billionnew dollarswill flow toTV in 2012vs. only $1.2billion moreto digital ©2012 eMarketer Inc.
  7. 7. Digital videoin 2013—nearly 10%of onlinetotal, butadvertiserswill spend$100 on TVfor every$6.90 ondigital ©2012 eMarketer Inc.
  8. 8. The stillimbalancedmarket cansometimesbe a littlecrazy-makingfor many inthe digitalvideo space ©2012 eMarketer Inc.
  9. 9. Several key factors will help orhinder US digital video ad spendingWe’ve identified 16 forces, including… CTV and tablets: best for the audience Fear: of cannibalization and lost revenues Inertia: TV’s power appears everlasting Audience: large online, but huge TV watchers GRPs: common currency, but dumb down digital Targeting: digital’s promise, but TV more reach Content: TV content still attracts brand dollars ©2012 eMarketer Inc.
  10. 10. Connected TVs superbly combine thestrengths of digital and TVThe best of television and digital video attractsboth audience and advertisers. ©2012 eMarketer Inc.
  11. 11. Tablets are major game changers forboth audiences and advertisersDigital marketers believe that tablets providethe best advertising experience. ©2012 eMarketer Inc.
  12. 12. Mobile videoad spendingwill rise bytriple digitsthis year andby over 93%next year ©2012 eMarketer Inc.
  13. 13. However, themobile admarket ismainlysearch andbanners,with a tinyslice goingto video ©2012 eMarketer Inc.
  14. 14. Comparinggrowth vs.dollarsshowsmobile videogrowing farmore but 8Xmore moneywill go todesktopvideo ads ©2012 eMarketer Inc.
  15. 15. As seen on the web? (Nah!) TV’s poweris still unmatched for many goals ©2012 eMarketer Inc.
  16. 16. Extra costs for unique onlineA sample of creative discourage many marketers from making the mostTV’s power: of digital’s strengths.Digital videostill dependsgreatly onTV creative(that willchange, butnot quickly) ©2012 eMarketer Inc.
  17. 17. The TV industry fears digital video willcannibalize its existing businessMany TV companies have a vested interest inkeeping digital video from undermining theircurrent revenue streams. Their tactics include: Bandwidth metering, also called data caps, could make digital users think twice before watching another video, since that would cost them extra or degrade their service. Furthermore, bandwidth metering is already a fact of life in the mobile space. Authentication. TV networks and cable operators might require users to prove they are paying subscribers before they can access video online, such as on Hulu. ©2012 eMarketer Inc.
  18. 18. The digital video audience is both verylarge and somewhat illusoryMost people still spend the vast majority oftheir video time in front of the TV. ©2012 eMarketer Inc.
  19. 19. Why do many people use socialThe digital media while watching TV?portion of a To get more adcampaignwould oftendo well toexpand onthe message“as seen onTV.” ©2012 eMarketer Inc.
  20. 20. Measurement difficulties mean whatcan’t be measured can’t be soldMost brand marketers want unified TV andvideo metrics before spending more on digital. ©2012 eMarketer Inc.
  21. 21. GRPs offer a common currency to bringdigital and TV together, and yet…Many marketers say GRPs dumb down digital,failing to measure engagement and interaction. ©2012 eMarketer Inc.
  22. 22. TV forever? Containers may change, butthe content basically remains the same ©2012 eMarketer Inc.
  23. 23. Blending online video with TV—and therebyboosting digital’s growth—will be slowIt will take several years for digital video tointegrate more completely with TV advertising. But time is on digital’s side. The five digital screens are where the audience increasingly watches TV and other video content, and brands need to reach them anytime and everywhere. Marketers get balance. Blending digital video into their TV messaging offers:  a way to reach audiences they might not have touched otherwise  a way to engage target customers in ways that TV doesn’t allow  a way to make their spending more cost-effective © 2012 eMarketer Inc.