Is your station’s site making video ad money?

If not, it’s missing the boat. Here’s an important read for local TV execs struggling with the question of how to make money off the Internet.

Saying that the online video streaming ad business is similar to what cable was in 1980, the article points out that advertisers love the medium, because it requires action on the part of the user. Consequently, they only pay for people who actually see the ad; whereas TV advertising is based on the assumption of reach.

Broadband video advertising look like TV spots, except they are shorter—usually 10 or 15 seconds. The major players are the big portals: AOL, Yahoo! and MSN, as well as niche publishers like ESPN.com. Broadband video ads don’t target a specific audience per se, but the users tend to be younger, sought-after demos. For example, Yahoo! LAUNCH: Music on Yahoo! reaches the MTV crowd, while ESPN360 attracts younger men.

“Broadband video is hard to ignore,” says Bob Flood, EVP/director, national electronic media, Optimedia, New York. “It’s a less cluttered environment and far more accountable than conventional TV advertising. You’re dealing with an engaged audience that is in lean-forward mode.”

More importantly for broadcasters is an understanding that the nice CPM’s these advertisers pay is driven by a lack of content. Who has content? Local broadcasters do, and it’s why they need to be in this business with a full-court press.

Bonus link: The New York Times gets into the video ad business.

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