Video Online Ads Three Times as Valuable as Display, But Still Have a Ways to Go

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Within online, video ads are the next big thing, but there’s still an uphill climb. According to a new report out via eMarketer, video ads are now generating the highest revenue per CPMs out of any online medium. Bain & Company, working with the IAB, surveyed seven anonymous publishers, and found that video ads were uniformly drawing a much rate than display ads.

But eMarketer offers the following caveats:

Advertisers rarely reveal exactly what they pay for ads, and publishers hardly ever let on exactly what they charge.
The cost of ads is based on at least two factors: the rate card cost and the discounted cost, which changes based on inventory, timing and customer. Typically, the data here does not indicate which cost—rate card or discounted—is being counted.
Even when the ad prices are essentially accurate, they are averages.

Indeed, a recent post over at NewTeevee found that the average CPM for a video ad was only $12.39. According to a separate eMarketer report, online ad spend will only amount to $505 million this year, a drop in the bucket compared to the nearly $20 billion spent in online last year. Even though video ads are more valuable, there’s resistance enough to cause worry among those purchasing inventory.

Video ad networks such as VideoEgg or Tremor Media have every reason to be optimistic. While banner blindness may plague many display ad vendor, video ads can anticipate increased double digit growth — as much as 50 to 70 percent according to eMarketer — as they find their legs. It’s just that for the current moment, things may remain tight.

Tags: Video Advertisement, Advertisement, Video, eMarketer, Corporate Communications, Marketing, Jake Swearingen

Jake Swearingen has written for Wired and Business 2.0, covering everything from locative technology to high-definition online video.

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jeremy blake

09/22/08 | Report as spam

RE: Video Online Ads Three Times as Valuable as Display, But Still Have a Ways to Go

Its great that video ads are commanding more than display. They are able to use audio and video and involve the users more through stimulating those senses. It is a fact that less people read or have time to read, so online video advertising fits well with the time we have to engage with a brand and its proposition.
I think that banner ads that don't have video can probably receive a better quality of user interacting with them in that they may be more qualified. By this I mean that if an advertiser wants clicks as a measure of success they can harness the power of information based selling, and get users to click to read more about the product or service the advertiser is promoting. I have no evidence to back this idea, although I feel watching a video may be an activity engaged in by more people, hence less qualified buyers. Arguably you are still getting your message across to more people so the advertiser should pay more as the ad has increased interactivity and branding power full stop. according to some research from the UK IAB the only medium here in Blighty to increase in spend other than online was cinema advertising, by a whopping 9% YonY. In credit crunch times the cinema offers escapism and film is the only medium offered, although a few locl restaurants still run static ads with a music overlay. So I guess we just love movies, short home made, professional it doesn't matter. And if online media publishers can charge more then they should. It is about time medis put its rates up when so many other businesses do.
Jeremy Blake Reality Training www.realitytrain.co.uk