Is digital video ready for the advertising big leagues?


Have you ever heard of Michelle Phan? I hadn’t until last week, when her likeness started popping up all over New York during the Newfronts, the 9-day long showcase of digital video content and advertising.

But my ignorance was my own. Turns out, Phan is a digital sensation with nearly a billion YouTube views, and almost 10 million followers across Facebook, Twitter and YouTube. She was just picked up by reality programming giant Endemol

What’s going on? Welcome to the era of digital video advertising, now a business capturing $3.6 billion in the US and €1.2 billion in Europe.

Curious but still cautious about online video (OLV)? Worried about scale? Wondering whether your audience is watching? Don’t want to be the only one taking the risk?

The scale is there…

…Because the content is there. AdAge counted 13 renewals for Web originals across just AOL, Hulu and Crackle. Earlier this year, Disney paid $500 million (with a $450 million performance bonus) for Maker Studios, a YouTube based company that generates 5.5 billion views a month.

What does that mean? The average online American now watches 1,068 minutes each month, according to comScore. That’s nearly 18 hours. Not TV levels yet, but still a LOT of video and a lot of opportunity to run pre-roll against it.

That inventory can be bought up front, the way you make a TV commitment, or via programmatic auctions, conceptually similar to the scatter market.

The most attractive demos are watching digital video

Want to reach higher income, more educated consumers? Move to digital. Recent data from Nielsen found “Overall, higher education and income levels were correlated with less TV usage, particularly at the early and late parts of the day.”

Meanwhile, TV viewing is declining for every age cohort except 65+

Traditional TV Viewing By Age

I can see it in my own family. I have a 12-year-old daughter. She’s on Season 3 of Gossip Girl and going strong. If you want to engage her (and my wallet), you better be advertising on tablets. She has not watched a single episode on our family TV.

Her 15-year old sister? Smartphone + short-form videos. She and her friends think they’re hysterical. If you want to reach her, you better be running mobile video on the long tail.

You’re not alone

Two recent surveys, one from AOL, the other from Digiday, found marketers increasingly enthusiastic about the possibilities for digital video.

In the AOL study, 73% of respondents had increased their online video investments in the last 12 months. This almost exactly matched Digiday’s survey, with 72% increasing video budgets, and 39% of those were re-allocating from TV spend.

A great way to get started

One great way to try programmatic OLV is something called Private Exchange. It allows you to buy premium, named publishers like ESPN through an auction based environment. Like Hannah Montana, Private Exchange video offers the best of both worlds. Check out this short explainer video.

So what are you waiting for?

Contact us to find out how we can help you today. My kids are eager to hear from you!