The IAB and Bain recently released a report on the pricing trends of online advertising. What is particularly interesting is the findings regarding online video inventory. These findings strongly support what we refer to at EveryZing as the “Paradox of Video Advertising”. On the one hand, user generated content continues to produce vast amounts of inventory, with YouTube alone delivering more than 3 BILLION streams every month, almost ten timed larger than its next biggest rival, MySpace. However, YouTube indicates they are only monetizing 2% of the total impressions on the site. A Q108 release from YouTube included data showing an effective CPM of videos in its partner program of only $.80.
On the other hand, the Bain study details quite the opposite in terms of professionally produced content, where CPM’s in their reference set were $43, and sellthrough was north of 90%.
However, publishers continue to struggle to generate strong growth in video consumption as detailed here:
Eric Franchi at MediaPost writes a good article on this topic detailing what publisher can do to drive consumption of media. One of his specific recommendations regards using SEO approaches for video:
“Site configuration/sharing/SEO: Too many times, the video section of a site is relegated to a single tab in the navigation bar, with perhaps a link or two on the left or right hand side. Video shouldn’t be relegated to a single channel; it should be incorporated throughout the site experience wherever it makes sense. It might require a partial site redesign, but the economics could very well justify it. Video also should always be easy to share, email or add to RSS. Finally, search is still king even for video, so SEO teams need to focus on driving users to relevant pages as they are for all other types of content. There has never been a better time for branded publishers to take advantage of their assets — content, loyal audiences, and sales teams — and create more online video opportunities. The ball is in their court!”
The challenges with Video SEO are primarily that video files do not have a lot of text associated, as well as the fact that many sites “lock up” their video content inside of flash media players. Yet at the same time search is emerging as the single biggest contributor of upstream referrals, with Hitwise showing a dramatic shift in video consumption from viral to search:
As with all of the successful online ad models that preceeded it, video advertising will take off once there is a critical mass of inventory available to advertisers. Publishers need to embrace best practices around Video SEO and viral features as they relate to video. This remains the biggest challenge in the market today.
