Online Video Ad Sticking Points, Pt.2

JULY 27, 2007


David Hallerman, Senior Analyst

Continued from Part One.

How much advertising people are willing to endure to watch video content for free remains unresolved.

While many people seem to appreciate the long-standing concept of free content in exchange for viewing advertising, several factors unique to the Internet turn free content on its head. That includes not only user-generated video content competing with the professionally created kind (at least for the audience's attention, if not always by quality), but also the wealth of the Web choices, video or not, that an individual can click away to in an instant if an ad annoys.

Still, 54% of the US online video viewers surveyed by the Online Publishers Association called advertising a fair way for Web sites to provide free professionally produced videos. However, implied on the flip side of that data is that 46% of respondents do not believe that advertising in exchange for free content is a fair deal. A further flip side implication in the data: 48% of respondents would rather pay to see their favorite online videos than watch an ad.

The length of online video ads has become a key pivot in determining how best to use the format. For example, NBC Universal recently announced that it would not accept online video ads longer than 15 seconds, at least to go along with short-form content (but it would continue to allow 30-second spots during full-length TV shows).

When Piper Jaffray specifically asked US adult Internet users if they are willing to watch advertising before a free online video, the responses split nearly equally into three groups: the 30% who are not willing, the 31% who said it depends on the content and the 39% (combined) who are willing (with 25% only willing depending on the length of the ad).

With near-even splits like that for the fee-free question and for ad-length concerns (see Part One of this article), it's clear that for both online video advertising and content, the debate on how best to use video for Internet advertising remains up in the air.