Online video ads becoming more important than TV spots to brands

The proliferation of internet-enabled devices and an overall greater reliance on the web for media consumption means internet video advertising may soon supplant traditional television ads.

Posted on Oct 23, 2012 by YuMe

The proliferation of internet-enabled devices and an overall greater reliance on the web for media consumption means internet video advertising may soon supplant traditional television ads, according to Business Insider.

According to Nielsen, 164 million people in the United States watched video content online in August of this year, with more than 27.2 billion streams during the month. That means the average viewer watched more than 166 videos online in August.

In addition, an August comScore report found that 52 percent of the total U.S. population was shown an internet video ad. In July, comScore reported that more than 9.6 billion online video ads had been watched during the month, meaning that the average viewer saw more than 60 spots in July.

As more Americans are watching content online, fewer people are turning exclusively to television for their media consumption. Business Insider cited statistics from Nielsen showing that 500,000 televisions have been removed from homes. In addition, an August report from ISI group found that cable television subscriptions have fallen by close to 6 percent since the beginning of 2010.

Internet-enabled devices replacing television sets
Part of the reason an increasing number of Americans are watching video content online is because more people own internet-enabled devices than ever before, providing an alternative to the television. For example, Nielsen reported in June that over the previous 12 months, smartphone adoption increased by 34 percent and tablet ownership went up 400 percent. During the first six month of 2012, internet-enabled television increased 25 percent.

In addition, another Nielsen study showed that 36 million people used their smartphones to watch online videos. During the first three months of this year, 45 percent of all households had a smartphone, Business Insider reported.

"The trend has been towards a broader mix of screens that people turn to for video consumption," Samantha Felix wrote in an October 10 Business Insider article. "Everything from smartphones to tablets to PCs to television are suitable for watching a video of any length. With this in mind, advertisers are moving significant dollars to new digital platforms, and seeking formats that move beyond the basic website banner ad, to find ways to engage with audiences by creating sharable content."

As a result, video advertisers are starting to follow consumers toward online devices. According to the news source, 38 percent of all ad dollars spent in the U.S. went toward the web, with 42 percent going toward television spots. Five years earlier, U.S. advertisers allotted 23 percent of their budgets for online and 41 percent for television.