TV advertising’s little brother, the online video ad is growing up fast and looks set to take on its bigger, older sibling in a war that looks set to change the way advertisers talk to consumers forever.
The online video ad market is currently worth a tidy $8.4 billion, and while experts predicted a bumper year for the TV ad market in 2012, the reality has proved to be very different – although it is still worth $70 billion. A lackluster performance of just 2% growth in 2012 has left the market in a vulnerable position and wide open to attack from its more vigorous and responsive online equivalent.
With over 4.6 billion online video ad minutes watched by 180 million users in the US alone, the top five networks including Google, San Francisco-based BrightRoll, Hulu, Adap.tv and TubeMogul streamed around 1billion ads each in June 2012.
These impressive figures come on the back of a recent announcement by the New York Times that TV viewing by young adults is at an all-time low. Those seeking jobs in digital or social media would be wise to bear these figures and these companies in mind when planning their next career move.
The Rise and Rise of Online Video Advertising
From humble beginnings, online video advertising is now set for huge growth, with significant shifts in when and where it shows within content. The pre-roll video ad remains the benchmark solution and retains the lion’s share of the money, but other functionality such as inskins are also proving popular. This dynamic and fast-growing sector will provide plenty of opportunities for talented and creative individuals.
Google’s domination of the market is not surprising given that the World’s third largest website – YouTube – provides almost all of the video content on its properties. Google showed 1.4billion video ads in June 2012, with BrightRoll streaming 1.38 billion, Hulu showing 1.32 billion, Adap.tv streaming 1.14 billion ads while TubeMogul streamed an equally impressive 1.04 billion advertisements. Between them these companies reached between eight per cent and 53% of the entire US population.
Research Suggests a Downturn in Spending on Airtime
The swagger displayed by the TV networks in early 2011, when they were charging 25% above their normal rate for airtime, has been replaced by a more sombre mood, as consumers refuse to spend and a downturn in manufacturing in other parts of the world led to belt-tightening by companies who would normally plow a large part of their budget into advertising.
Still very much the baby of the family, online video ad revenue is catching up – and quickly. A joint report issued by the Interactive Advertising Bureau (IAB) and global accountancy firm PriceWaterhouse Coopers (PwC) indicates that online video ad revenue increased by around 15% in the first quarter of the year compared to the same period in 2011. Not quite the 24% jump experienced between the first quarter of 2010 and that of 2011, but 15% is still pretty good going and job seekers only have to have a look on mediajobs.com to see how many digital and social media jobs there are out there, which indicates this is a booming sector.
As more consumers conduct larger proportions of their lives online, switched on marketers are investing bigger portions of their budget in cute interactive solutions provided by these networks to reach their digitally conversant customers. With predicted double-digit growth in the market it certainly looks like the Internet is attracting consumers and the subsequent advertising spend that follows and job seekers should be watching with interest.