Borrell: TV stations still losing, in of all places, video!

comScore chairman and CEO, Gian FulgoniGian Fulgoni is a major player in the world of web advertising. As chairman and co-founder of comScore, he has played a leadership role in the commodification of online display advertising (not necessarily a good thing, of course) and is a keeper of the metrics used to drive the advertising business. When he speaks, it’s important to listen, and what he’s saying these days is that video is the bomb!

In a Monday speech to the OMMA Hollywood conference in Los Angeles, Fulgoni admitted that clicks aren’t what they used to be. According to NewTeeVee.com, Fulgoni said, “We have to get off the idea that a click is a valid metric. There are many other ways of measuring the effectiveness of ads.” The new biggie, he said, is video.

ComScore can track the impact of online video ads by measuring whether Internet users who saw an online video ad then went on to visit a site or buy a product, for instance, he said. Brands using online video ads have seen lifts of anywhere from 20 percent to 40 percent or higher in terms of incremental buying with online video and rich media over other ad forms, he said. “The reason advertising works well on TV is it has sight, sound and motion, and you have that in online video. It’s easier to communicate a message and easier to persuade people,” he said.

The growth in viewing of long-form content online is also a boon for the growing online video ad market, he said. The longer people watch, the more advertising opportunities there are. The average online Internet user is watching 3.5 minutes at a time, and that keeps increasing. “That’s a really important metric because if we just stick with three-minute video clips that limits the number of ads,” he said. “You want these longer-running shows so you can maximize ad dollars. This is one of the key components of the future of online advertising.”

Borrell projects growth in videoFulgoni didn’t say whether the ideal format was pre-roll, post-roll or something else, only that video was the place to be for growth. This syncs with data from Borrell Associates that projects video, email and local search as the three growth vehicles for online advertising over the next five years.

For television stations, video advertising should be a logical extension of existing knowledge, but newspapers continue to dominate in the local online video advertising category. Gordon Borrell told me this morning that new 2008 numbers (due out in a couple of weeks) reveal that newspapers made about $165 million last year from streaming video advertising, while TV stations made $105 million. Interestingly, streaming video was just 5% of newspaper website revenues, but 10% of TV website revenues.

Meanwhile, and even more amazingly, yellow pages companies made between $85-100 million last year from streaming video. Think about that for a second. Online, yellow pages companies are making nearly as much local money with video as television stations. This is insane, and, as my partner Steve Safran so famously said a few years ago, “You’d think that the one place video companies could win in is, well, video!”

Gordon BorrellFor Gordon Borrell, this issue has been a real sore spot for a very long time.

The online video-advertising story reads like a page out of “The Innovator’s Dilemma.” It’s another situation where being an expert can actually work against you. The vast majority of video advertising isn’t what TV managers know — high-quality, slickly produced, 10- or 15-second commercials. It’s good-enough quality, and its more of an infomercial. Unfortunately, broadcasters are still relying on TV managers to understand this wildly innovative environment. It takes a separate staff, with divergent ideas.

TV stations are locked into thinking that monetizing THEIR videos is where it’s at, but the truth is that small and medium-size local businesses are making their own videos, and that’s what they want their potential customers to see. Advertising is content in the Media 2.0 world. If they can’t make their own videos, there are plenty of companies out there that will make them for them. And I hate to keep beating an old drum, but this an essential clue to “enabling commerce” in the future, the new role for local media companies today and tomorrow.

For broadcasters, this ought to be a no-brainer, but the evidence, once again, suggests it is not.

Comments

  1. best darn newsletter out there. (please thank stevie for the twitter link when you see him)

Trackbacks

  1. […] Last time Borrell Associates put out a report measuring local online video advertising spending, newspapers beat local TV in total revenue. The latest numbers, due out in a couple weeks, still have newspapers driving more local online video revenue than TV stations. But the bigger surprise is that internet yellow pages — which are increasingly selling advertorial video to small and medium business — are poised to surpass local TV in local video revenue, too. […]

  2. […] PoMo Blog » Blog Archive » Borrell: TV stations still losing, in of all places, video! . Sphere: Related ContentIf you enjoyed this post, make sure you subscribe to my RSS feed! Bookmark Vidopp ↑ Postedin: News | Tags: […]

Speak Your Mind

*