As we enter a new decade, online video is truly coming of age. Usage is growing with sites like 4 On Demand from Channel 4 and increasing amounts of video on newspaper sites including guardian.co.uk and telegraph.co.uk. As most media are suffering steep declines in revenue, online video advertising is offering new opportunities.
The media agency, MPG, estimates UK online video ad spend was £40m in 2009 with that figure set to rise to at least £60m this year. T-Mobile, Oxo and Magners are among the many brands that have added an online video dimension to recent ad campaigns.
Last year, household, health and personal care giant Reckitt Benckiser raised eyebrows when it moved some $20m (£14m) of its US TV advertising budget online, including online video ad networks The company was aiming for more efficient spending and targeting, something that traditional online ad formats have delivered and which online video is starting to offer as well.
From pre-rolls to bespoke video channels, online video offers more options to measure and target viewers than traditional TV, yet many advertisers still have concerns, in particular around cost.
"By its nature, online video can add incremental reach to a television ad campaign," says Brian McGee, business director at Mindshare. "But cost remains a barrier and the measuring tools are inconsistent. Even as sales prices fall, clients are looking at it and thinking it's more expensive than television, which, for a relatively new platform, can be very offputting."
The cost of buying an online video ad can be as much as 35% higher than that of buying an equivalent TV ad. This is largely because there is less online advertising inventory available – ie physical positions on a website where the ads can be positioned, and this inflates the price.
So while digital is known for its accountability, online video campaigns are not in the plans of very budget-conscious clients. A major concern echoed throughout the industry is that online video still lacks the panel-based measurement systems the clients are familiar with, led by Barb for TV, NRS for newspapers and Rajar for radio."The click-through data (on online video) has not been compatible with other media currencies nor has it sat comfortably on a media plan," says McGee.
Indeed a recent study by WebTV Enterprise cited research and measurement as the two key reasons that were hampering growth in the sector. "The absence of one pervading UK measuring metric is still what is stopping large marketers from investing more than test budgets in online video," says Newton.
That could all be set to change. Following the success of US systems such as Video Census, 2010 will see a flurry of new systems that aim to inject a robust, panelbased consistency into the online video advertising market.
UK Online Measurement Company (Ukom), an industry body backed by the Internet Advertising Bureau (IAB) and the Association of Online Publishers and using data provided by media measurement company Nielsen, is to provide panel-based metrics by demographic, making online video data comparable with the metrics of Barb and NRS. The aim is to provide the metrics that agency planners require to build a fully-functional, cross-media schedule and provide data for online video that has traditionally been lacking.
"Until now we have seen clients just casting online video off their media plan simply because its metrics are too fuzzy," says Guy Phillipson, chief executive of IAB. "Ukom will allow advertisers and their agencies to plan online campaigns that target specific audiences using an industry-approved system that gives a far more focused reporting structure from passive measurement, such as the time spent on a site, or the dwell time on the video. Later it will allow active measurement so that participating sites can tag their video inventory to allow more granular reporting.
Ukom marks one of a number of big changes in the industry. Another problem has been the lack of a third-party serving mechanism for online video. "At the moment we can measure video impressions and click-through rates but we struggle to see overall reach across the campaign, especially for ads that run across a series of platforms," says Camilla Day, head of video on demand at media agency PHD. Part of this is set to be answered with the development of Vast 2.0 (Video Ad Serving Template) which will allow advertisers third-party hosting across a number of publishing platforms.
"It would allow for deeper measurement and help to compare across online display and online video," says Day. "The challenge is that it needs the buy-in of publishers first." BSkyB, Channel 4, Microsoft and YouTube are among the publishers that have committed to implementing it this year.
With Comscore also on course to release its own measurement tool, 2010 will be the year that online video joins its cousins at the top end of the most rigorous and consistent media planning metrics. Now the onus is on the planning community to ensure that in the quest for convincing numbers it doesn't overlook one of online video's strongest assets: its ability to capture the attention of a viewer. In an increasingly noisy media world, the engagement that online video delivers is the holy grail that advertisers are eager to grasp. Panelbased metrics help, but without intelligent analysis they will only ever tell one part of the story.
