Hmm. A few days ago CNN.com had an article titled “More turning to Web to watch TV, movies“. The article starts with a sure winner for the times, “If saving money is … “. The punch line is that in order to save money people are watching video on broadband-enabled TVs, on websites using $99 set-top devices and with video handhelds. It goes on to state that this is partly because everything online is free.

I think they give the recession way too much credit. High-end broadband enabled TVs are expensive, and only the tech-friendly masses (there are quite a few, I must admit), will delve into the mass of wires connected to their DVR, TV and satellite or cable receiver to install another cool box. The growth of online video is strong, and pretty inexorable. Given we’re all growing up in the me generation, and we’re spoiled for choice, we want the ability to watch stuff anywhere and technology is helping us achieve that. As I’ve said on these pages before, the catch is going to be whether the video distributors, producers and syndicators can make advertising money on their content that is being viewed, because pay-per-view isn’t working. And as the content (as the article describes) is pushed over multiple formats, and ad buyers want all the distribution points, it gets a tad bit harder to monetize. But if you have those troubles, call YuMe

Jayant Kadambi

I’m all for research and science. We need lots of it in the advertising business; so that we can replace guesswork and trial and error. And the nasty reputations that come along with the combination of media planners, publishers and ad networks using instinct to make plans, rather than hard data. Often-times it’s not their fault. The science is not ready, especially in video advertising, being that it’s a nascent market.

So, I read this article on Online Ad Clicker Demographics recently and they report the percentage of people in various age and income brackets that click on ads. It was interesting to note that younger people were more likely to click on a video advert than a banner, but as they grew older, the propensity to click on an video advert declined to mirror that of other ad units. The report goes on to find similar trends when comparing income.  People earning less than $50K a year, click far more on video adverts than on display, but as they earn more, they fall into line with the other ad units.

So, video ads are more engaging for younger and lower-income people and as engaging for everyone else. Imagine what you’ll get if you’re an advertiser and the video adverts are actually contextually matched to the content with the sophistication that 10 years of display advertising has brought. As I’ve pointed out on these pages before, online video advertising is still very young as an industry.  I’ll bet when this survey is run again in 2 years, video is clearly more engaging across all demographic types.  Assuming it’s done correctly.

- Jayant Kadambi

There’s some interesting statistics in a year-end survey that looks at trends among viewers of television and online video. The survey, commissioned by a web personalization service company, looked at the habits of 824 respondents and came up with some findings that are encouraging to people like us who are placing their bets on the future of online video and advertising adoption.

Notably, more than half of the Web-connected TV viewers – 55 percent – said they also watch video on other devices, including their computers, mobile phones and devices such as iPods. Of those same viewers, 65 percent say they are watching professionally produced video. And a full one-third of them say they are spending more than four hours a day watching video on something other than traditional television.

What’s interesting to me about the survey was that, while everything seems to indicate growth of online video, the survey found that consumers are also frustrated because they have to spend “a few minutes” to find something worth watching. (This survey, again, was commissioned by Cambridge-based ChoiceStream, which offers Web personalization technology.) This was sort of funny to me because, as anyone who has ever channel-surfed a cable or satellite lineup of dozens and dozens of channels, the TV experience isn’t much better. And then the survey revealed that viewers weren’t any happier with the TV experience.

The survey goes on to talk about personalized guides to help you find something worth watching on the Internet. By then, I knew all I needed to know from the survey: people aren’t just watching TV on the TV anymore. They’re turning to other sources and other devices – and while they appear to be somewhat frustrated with the process, they’re willing to experiment with online video.

Jayant Kadambi

When advertisers launch campaigns, they tend to target particular demographics. To identify that demographic, they usually refer to the reach numbers of a particular Web site or ad network but also turn to research firms that track and measure such data, such as Comscore. In other words, Web sites – or specific pages within a Web site – are targeted for the campaign. And this passes as an acceptable proxy method to reach a demographic audience.

Well, I think for video, TV’s got it right. In addition to site demographics, TV advertisers use the content or content category as a proxy for the demographic audience. Based on years and years of experience, we pretty much know who watches the Super Bowl (everyone), Dora the Explorer (kids), and American Idol (18-34). Advertisers should insist on being able to target channels, or specific categories of content, on the Web much as they do today on TV.

When an advertiser says he is showing up on Discovery Channel or the Oxygen network or HBO, we have an instinctive understanding of both the content and demographics. We need to add this way of thinking to the online video advertising landscape. In addition to the Web sites or domains on which the ad will run, advertisers also should be asking the ad networks or Web sites to name specific content or content channels on which the pre-roll is running and use this as a proxy for the demographics.

It’s a bit easier with TV and it needs to get that way online. It’s easy to show the client that their ad is running on the third slot at 4 p.m. on Sunday on the Lifetime network. In the online world, it’s a bit more difficult and it shouldn’t be. It just doesn’t seem right to tell an advertiser, “Please click on www.domain.com until you see the ad… it’ll show up, just keep clicking.”

Jayant Kadambi