Web video advertising may be plagued by some of the same squishy metrics that have bedeviled traditional television ratings for years. New problems in estimating the size of the market suggest that the supposedly quantifiable Web is in fact sometimes too difficult to quantify.
Some market research firms forecasting the size of the online video ad economy aren’t counting money spent on brand integration and product placements.
Influential media research firm eMarketer recently revised its annual online video ad-spending numbers downwards by two-thirds to $505 million, citing a change in methodology. But neither its initial nor its revised projection accounts for money flowing into brand integration, product placement and host mentions in Web video.
“The medium may be more measurable, but ad spending isn’t necessarily.”
That suggests the size of the Web video economy is being underestimated by the amount of ad dollars flowing into high-profile Web shows such as NBC-backed “Gemini Division,” EQAL-owned “LG15: The Resistance” and Revision3’s “Diggnation.”
That’s a problem because they generate most of their ad revenue from brand integration and host shoutouts, as do many Web studios including Next New Networks, Revision3, ManiaTV and For Your Imagination.
“The vast majority of revenue we derive for our shows are from brand integration,” said Greg Goodfried, one of the executive producers of “LonelyGirl15” and its spinoffs, which have inked deals with MSN, Disney, Paramount and Procter & Gamble.
The uncertainty surrounding market estimates touches nearly all parties with a stake in the Web video business, including media agencies that use macroeconomic figures when evangelizing the medium and venture capitalists who search out growing markets.
“Brand integration is one of the biggest segments of the online video ad market, maybe bigger than pre-rolls,” said Raj Amin, CEO of HealthiNation, the online video health information network.
Lehman Brothers and Forrester Research also forecast the overall online video ad economy. Lehman has said advertisers will spend $1.1 billion on online video ads this year, but did not respond to requests for comment on its methodology. Forrester Research expects online video ad spending to hit $989 million this year, up from $471 million last year.
There are no current estimates on the size of product placement deals in Web video. But Web TV networks such as Revision3 and For Your Imagination said they charge $60 to $80 on a cost-per-thousand basis for such buys.
What’s important is the big picture: Online video ad spending is increasing this year, whether it’s by 56%, according to eMarketer, or by more than 100%, according to Forrester.
Problems Emerge Measuring Web Video Ads - TVWeek - News
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