Wednesday, March 24, 2010

Online video ad performance increases as creative quality improves; CPMs are better, as well

TBI Research continues to do great work releasing an interesting report concerning the performance of online video advertising.

The industry research firm reports that online video viewing more than doubled last year, attributing the increase to the availability of more quality content. In addition, online video advertising is finally coming of age "supporting the 30 percent to 50 percent 2010 revenue growth most analysts forecast". (But don't get me going about analysts.)

TBI Research's findings include:

  • Viewing/Sellout increases are driving much of the industry's growth, as well as small rate increases.
  • YouTube is getting "double-digit" pre-roll CPMs, and is finding it easier to sell, as well
  • The entertainment category continues to lead the way -- no surprise since they already have the video -- but other categories are starting to spend
  • Online video advertising is enjoying better click-through-rates than regular display
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Rory Maher, CFA, of TBI Research, writes that the executives the firm talked to attributed the better performance of online video to better creative, and improvement over the many online video ads that were basically repurposed television ads played online. The report concludes that the improvement in performance should help sustain the growth in CPMs for online video advertising.

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