Online video ads generate more revenue than TV spots

As consumer use of smartphones and tablets increase, brands can generate more revenue and drive consumer discussions using mobile media advertising.

Posted on Jul 31, 2014 by YuMe

Today's consumers have more options than ever before when it comes to viewing video content. While television remains a viable and popular option, people can also stream video over the Internet on a personal computer or through a connected TV device. They also have mobile options, as tablets and smartphone usage has grown considerably year after year and people are taking advantage of the option to view video on these devices.

This new landscape, created entirely by technological innovations that have shifted the behavior of consumers, has given companies a strong ally from a video advertising perspective. With so many channels and platforms to deploy an ad on, brands are increasingly devoting large sums of their video marketing budgets to create ads that can be seen by potential customers, regardless of the device they may be using. This new strategy has led to an increase in profits for companies as well.

Variety recently reported CBS stated it earns as little as 10 and as much as 20 percent more revenue from video ads when viewers' stream content online than it does when the same shows air on television.

"We actually make more money per viewer streaming than we do on television," David Poltrack, CBS's chief research officer, told the magazine. "If you stream our programming online, you're seeing a full complement of advertising – you can't bypass it."

This is one of the inherent advantages for companies that invest in digital video advertising. Unlike TV viewers who can change channels during a commercial, audience members streaming content online have to watch an ad in its entirety when it's being displayed if they want to continue watching their programming. There is no option to skip or fast forward through online video ads. This creates an advantage for brands and video ad publishers.

This is one of the reasons for the growth in digital video advertising and the use of the strategy should continue as consumers stream more video content online, whether it is through a computer or mobile device.

Mobile media advertising helps drive consumer discussions
The popularity of smartphones and tablets seems to have increased due to the fact that people who own these devices can accomplish a number of tasks that at one time required the use of computer. Now, thanks to advances in technology, people can do all the things offered by a computer on mobile gadgets, including viewing video. As a result, companies are now spending more of their marketing budgets on mobile video ads than ever before, largely because they're effective.

Citing a recent study on mobile ads from the Mobile Marketing Association that polled 3,000 consumers, Adweek stated that consumers responded more positively to certain mobile ads than TV commercials. Of the 20 mobile ads shown to those participating in the research, 19 were found to be more exciting than their TV counterparts.

Additionally, the mobile ads evoked a strong sense of emotion with people as opposed to the spots created for TV. However, the overarching point of the study was that even if people didn't have good things to say after viewing certain mobile ads, the strategy generated much more conversations among participants than the ads that were shown on television. For marketers, this is good news as the hope for any advertisement is to drive engagement and interaction. Mobile seems to be the ideal platform to accomplish this goal.

All told, video marketing efforts will continue to increase for companies. Video has shown to be a much more effective marketing tool than other forms of advertisements, and investments in this medium will likely continue to increase.