YouTube has been the undisputed 800-pound gorilla of the online video market since the beginning of time. And it's key message to advertisers at last night's "Brandcast" NewFront event was to emphatically remind them of its massive size and its reach into the youth market, factors it believes should drive advertisers' attention and spending.
Whereas last year's Brandcast was all about the 100 new channels that YouTube was funding/launching, this year's event was more of a return to its roots: it's ability to give native digital talent the platform to reach and grow huge audiences. Because a lot of this talent resonates first and foremost with younger digital natives (in Nielsen parlance "Generation C"), YouTube says it's in a unique position to deliver these audiences. YouTube cited Nielsen data that it reaches more 18-34-year-olds than any cable network.
Netflix reported solid Q1 results yesterday, gaining 2 million streaming subscribers in the U.S. and another 1 million internationally. Netflix now has 27.9 paying subscribers in the U.S. and 6.33 paying subscribers internationally. With growth re-started since the 2011 Qwikster debacle, a persistent question is how big can Netflix become in the U.S.?
Traditionally many have thought the answer is in the 30 million subscriber range, which is where the biggest premium channel, HBO, has pretty much leveled out. This line of thinking assumes that Netflix is essentially another premium channel and consumers will treat it as such.
But Netflix's CEO Reed Hastings always answers the size question by asserting that Netflix can grow to become 2-3 times HBO's size, implying 60-90 million subscribers ultimately. He points to differentiators like Netflix having more content, being less expensive and available on more devices, having greater personalization, etc.
At starting prices of $8/month or so, affordable subscription video on demand (SVOD) services like Netflix, Hulu Plus, Amazon, Blockbuster and others would seem to appeal to middle and lower income Americans. But a new report from Nielsen finds the exact opposite is true: wealthier homes, with household income over $100K/year, adopt SVOD services at 185% of their index, while lower income homes, with household income under $50K/year, subscribe at just 47% of their index.
Adding to the picture, "Professional" homes subscribing to an SVOD service are at 150% of their index, while "Blue Collar" homes are just 63% of their index.
The data seems to support a contention that Netflix has repeatedly made, which is that SVOD services are typically adopted in addition to - not in substitution for - pay-TV services. To the extent that pay-TV rates have continue to increase, it makes sense that only upper income homes can afford to then layer on an SVOD service on top of pay-TV.
Native advertising, which refers to branded content or ad messages that are cohesively integrated directly into web sites, are getting lots of attention these days as an alternative to pre-roll video advertising. A study released by Sharethrough and Nielsen today is putting some brand lift performance numbers behind the debate.
Using Nielsen's Online Brand Effect tool to measure viewer response, the native advertising technology specialist found that five campaigns it studied produced higher brand lift from native advertising exposure than from pre-roll video impressions. In a campaign for the soft drink brand Jarritos, exposure to native ad content elevated favorable brand perceptions by 82%, compared with 2.1% lift among those who saw pre-roll ads. In another for a CPG brand, native ads drove a 42.2% brand lift vs. none for pre-roll ads. (see infographic below)
I'm pleased to present the 171st edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. Leading us off today, Colin digs into Nielsen's new "zero-TV" homes data, part of its Q4 '12 Cross-Platform report. When Colin crunches the numbers, he concludes that the U.S. pay-TV industry may have lost 1.1 million subscribers last year, who moved into the zero-TV category. That would be above other estimates, which range from flat to down about 500K.
Of course one of the industry's key initiatives to add value has been TV Everywhere, and on that front, there were refreshingly candid admissions this week from both David Levy, head of Turner's sales, distribution and sports, who said he was "embarrassed" at TV Everywhere's progress, and Lauren Zalaznick, NBCU's chairman, entertainment and digital networks, who said it's too confusing. Both are right, and there are other reasons as elaborated in the recent Ultimate Guide to TV Everywhere (free download).
Contributing to the pressure on pay-TV providers is the ever-expanding range of quality content available online, and 2 more efforts surfaced this week, Conde Nast's new digital video network, and VEVO TV, a 24x7 music video network.
Separate, Colin has released his excellent new white paper, "Second-Screen Apps for TV" (free download here)
And a reminder to sign up for "Sizing Up Apple TV" a free video webinar on April 2nd featuring Brightcove's Jeremy Allaire and me.
Listen in to learn more!
Click here to listen to the podcast (20 minutes, 42 seconds)
Nielsen's new Q4 '12 Cross-Platform Report has identified just over 5 million "zero-TV" homes in the U.S., as Nielsen calls them, an increase from 2 million in 2007. Not to be confused, these aren't homes without TVs (75% of them still have at least one); rather they are homes that don't receive programming over traditional platforms (i.e. pay-TV and broadcast). Instead, almost half of them (48%) opt for OTT services like Netflix, Hulu Plus and others for content.
The growth in "zero-TV" homes should come as zero surprise. In fact, if there's anything surprising, it's that the number isn't already higher. But who these zero-TV homes are is less clear: are they cord-cutters or cord-nevers? The fact that almost half of them are under 35 suggests many are cord-nevers. Yet, the 2 main reasons for not subscribing to pay-TV (36% due to cost and 31% due to lack of interest) suggests many cord-cutters. Either way, with only 18% of them considering subscribing to pay-TV, most may well be "permanently cordless" and beyond the industry's promotional efforts.
Online video ad buying continues to shift toward, but also improve upon, conventional TV ad buying, with the latest evidence that Adap.tv is now optimizing audience targeting against data from Nielsen and comScore.
As Toby Gabriner, Adap.tv's president, explained to me, the process starts with an algorithm the company has developed to predict a publisher's audience composition. The algorithm is based on numerous data "signals" (e.g. content type, time of day, browsing behavior, 3rd party profiling, etc.) that are continuously updated. The audience profiles are then used to focus on impressions that should index high against Nielsen Online Campaign Ratings (OCR) and comScore Validated Campaign Essentials (VCE).
Colin Dixon, senior partner at The Diffusion Group and I are back for the 150th (whoohoo!) edition of the weekly VideoNuze-TDG podcast. This week Colin and I talk about how on-demand viewing - through both DVRs and online - is changing the landscape for TV networks and advertisers.
First up, Colin shares some eye-opening numbers from the start of this year's TV season, as reported by the NY Times. Certain shows like NBC's "Revolution" and "The New Normal" plus CBS's "Hawaii Five-o" gained a whopping 40% more viewers due to DVR-based viewing in the 3 days following their premieres. This new viewing dynamic, particularly among the coveted 18-49 cohort, underscores the new reality of on-demand's importance in assessing a show's potential. Premiere night alone is no longer determinative (if it ever was!).
On-demand viewing is also a conundrum for advertisers and agencies when creating media plans. And that's why this week's announcement by Nielsen of its Cross-Platform Campaign Ratings solution is a big step forward in monetizing audiences across screens. Online has emerged alongside DVRs as a legitimate viewing alternative, and advertisers need to harness its potential. Colin and I discuss how Cross-Platform helps create a "common currency" measurement with TV, which will appeal to TV ad buyers, while helping content providers better value their online ad inventory. It's a complicated topic, but as Colin notes, the shift from "broadcaster-centric to consumer-centric" is causing huge ripple effects in the ecosystem.
Listen in to learn more!
Click here to listen to the podcast (18 minutes, 9 seconds)
Yesterday Nielsen made its Cross-Platform Campaign Ratings commercially available, following trials by GroupM, ESPN, Facebook, Hulu and Unilever. Cross-Platform provides, for the first time, "unduplicated and incremental reach, frequency and GRP measures for TV and Internet advertising." Cross-Platform brings together Nielsen's Online Campaign Ratings (OCR) with its longstanding national TV panel.
The Cross-Platform launch follows Nielsen's announcement two weeks ago that 15 leading video and digital ad platforms have integrated OCR, plus last week's news that the CW Network will use OCR to measure its online viewership and offer demographic guarantees for online advertisers for the 2012-2013 TV season. As I explained last week, Cross-Platform is so critical to online video advertising because it helps align the ecosystem with media buying expectations of the multi-billion dollar TV advertising industry.
Talk to anyone involved in the business of online video advertising and they will quickly say that the number one challenge to increased spending is better audience measurement. If only advertisers and agencies had a TV-style Gross Rating Points (GRP) metric - not just impression and clickthrough levels - to gauge the effectiveness of their spend, then traditional TV ad dollars would flow more freely into online video campaigns. Inevitably, the online measurement discussion focuses on Nielsen, the undisputed king of TV ratings, whose measurement standard is the common currency for billions in brand advertising dollars.
And that's why Nielsen's announcement yesterday, that 15 leading video and digital ad platforms - which together deliver thousands of online video ad campaigns and billions of impressions - are integrating Nielsen's Online Campaign Ratings (OCR) for use by their clients in campaign planning and analysis is a big milestone. As Amit Seth, Nielsen's EVP of Global Media Products explained to me late yesterday, these new partners will help cement OCR as an "online GRP" helping them to establish accountability and ROI quantification, two pre-requisites for traditional TV advertisers.
It's no secret that with consumer behavior fragmenting over different video sources and media-related activities, advertisers are having a tougher time than ever reaching their targeted audiences. Especially elusive are younger, lighter TV viewers. No surprise, these lighter viewers skew younger with about 31% of 18-49 age group in the category. They're also choice targets for advertisers: they're wealthier, more educated and more diverse.
To help prove the efficacy of online video advertising as a method for reaching these viewers, yesterday Google/YouTube and Nielsen released new research demonstrating that lighter TV viewers (who average 39 minutes per/day) are more effectively and cost-efficiently reached with online video advertising that compliments traditional TV advertising.
Yesterday's news that Nielsen is collaborating with GroupM, the largest media buyer in the world, to introduce "Nielsen Cross-Platform Campaign Ratings," is the latest move by the Nielsen to get its arms around the elusive problem of coherently measuring online video advertising. As I recently wrote, many in the advertising and content community believe there's a "measurement crisis" as video consumption rapidly splinters to numerous new connected devices.
Given that "what can't be measured, can't be sold," cohesive online video measurement is essential. And since Nielsen is the gold standard in TV ratings, many in the industry have expected it to pick up the mantle in online video as well. That has led to some grumbling at Nielsen's perceived slow pace of innovation, and the drag this creates on online video ad spending.