Tuesday, April 15, 2014, 10:40 AM ET|Posted by Will Richmond
Reading through a WSJ article yesterday, "Advertisers' Dilemma In Online Video - Reach or Frequency?" it struck me once again how silly it is to keep reinforcing a debate of online video advertising versus TV advertising. Five years ago this debate may have had some merit. But in 2014, savvy advertisers know it's really online video advertising and TV advertising. The two are highly complementary and are actually blurring as many of the traditional distinctions between them continue breaking down.
The article fairly asserts that TV advertising still offers the best reach opportunities for advertisers (even despite the fact that today's hit programs receive a fraction of the audience as did hits of 20 years ago). Equally true is that certain audiences (particularly younger ones) are migrating their viewership to online/mobile video, so being able to reach them in the first place, and then to do so with sufficient frequency to accomplish key goals, is getting harder and more expensive all the time.
In fact, almost two years ago YuMe and Nielsen collaborated on a study demonstrating that an online video augment to a TV campaign improved reach, enhanced frequency, reduced cost per impression and improved recall. At the time I wrote that while specific results will obviously vary, the core logic of thinking of online video and TV as complimentary made a lot of sense. It does even more so now for additional reasons.
First, there's been a significant rise in mobile viewing on smartphones and tablets - up 719% since Q4 2011, according to Ooyala. And it's not just short-form clips; Ooyala's data indicates 53% and 35% of smartphone and tablet viewing time, respectively, was spent watching video longer than 30 minutes.
With TV Everywhere content choices continuing to increase, mobile devices will have even more value. And the line between mobile and TV is getting blurrier still, as popular devices like Chromecast bring the two experiences together, ushering mobile into the living room itself.
The second factor is the rise of high-quality online originals. I believe, as do many others, that we're in a golden age of television. But the twist is that "television" isn't defined by the TV set, but rather by the content. More non-TV providers are creating TV-style programs these days than ever - whether it's Netflix, Amazon, Hulu, Xbox Studios, AOL, Vice, Yahoo (soon), etc. As the audience size for these programs inevitably increase, advertisers will have no choice but to move some spending against them to ensure their messages are seen.
Last but not least, throw in the momentum of programmatic buying - which allows advertisers to target audiences anywhere they are by using data and the traditional distinctions become even harder to maintain.
This is the reality of today's landscape - shifting viewer behaviors, relentless technology innovation, and a proliferation of quality programming. Smart advertisers shouldn't be thinking of TV vs. online video, but rather how the two can work together to most cost-efficiently deliver their messages. It may be less sexy to position the issue as friendly rather than confrontational, but it's a lot more meaningful.
Note: at the 4th annual VideoNuze Online Video Advertising Summit on June 25th in NYC we'll be extensively exploring this topic. Save with early bird registration now!