Shrinking ad spending in the United States has so far mainly affected channels such as TV and print, but Web spending is hardly immune to cuts — even though it continues to grow, totaling $5.8 billion during Q1 2008. Search remains strong, yes, but display ad giants like Yahoo, MSN, and ValueClick have seen flagging demand and shrinking prices. Of course financial and mortgage industry spending on all forms of advertising, including online lead generation and search, has plummeted.
Video production budgets may be next. Numerous agency executives recently told ClickZ that their clients’ appetite for video and rich media experiences, especially those extravagant projects involving elaborate production spending, has weakened of late. “As the future is a little more uncertain, we’re seeing a bit of a slowdown,” said Daniel Stein, CEO and co-founder of San Francisco-based EVB. “Production budgets are growing a little bit more slowly than they did.”
Stein suggested the trend is owed partly to marketers’ perception of the online channel relative to television. Because Web budgets are historically low-priced, there’s more pressure to keep them tight in a downturn. “Digital is supposed to be cheaper,” he said. “TV is an institutionalized process that can warrant bigger budgets.”
Marketers operating in more entrenched areas of online video advertising, such as in-page ads that use video ad creative, say they haven’t seen a fall-off in marketer interest. That may be partly owed to the fact that online video creative of the sort appearing in pre-roll and video banner units is drawn from broadcast spots.
“Advertisers are getting more comfortable with it,” not less, according to Chris Allen, director of video innovation for Starcom USA. Allen said TV networks had improved their cross-selling broadcast with online inventory. “We’re starting to see them introduce online video as a complement.”
Geary Interactive CEO Andreas Roell agreed demand for online video ads remains strong from a media standpoint, but he also concurred that clients are putting a squeeze on production budgets. He said those requests can often be accommodated by reducing the length of videos or finding cheaper ways to produce them.
When it comes to cutting production budgets, the lowered expectations consumers have for Internet video comes in handy. “We’re finding ways to do it in-house, versus doing it on production company side,” Roell said. “Lower quality [video] has more of a viral effect, so doing it in-house is a little less of a stretch.”
Weak Economy Hits Video Ad Production Budgets - ClickZ
If you enjoyed this post, make sure you subscribe to my RSS feed!
0 responses so far ↓
There are no comments yet...Kick things off by filling out the form below.
Leave a Comment