While I talked about Social Media being misunderstood, the real dollars will be in online web video advertising. Seems pretty straight forward – the web delivers and is measurable. Connecting the dots you can see that advertising is changing which basically means the users are changing. User behavior is alway leading advertiser behavior change. Except video advertising will be done in a new way.
Report out today shows that Professionally-produced Web programming yields high CPMs, according to a new report from the Diffusion Group. The CPMs for long-form online content are $40 today and will reach nearly $46 in 2013. Meanwhile, CPMs for short clips are clocking in at about $30 and will increase to about $34 in five years.
User-generated videos generate CPMs of about $15 today and will reach $17 in 2013. The report also found that user-generated videos account for about half of the online videos consumers watch but only 4% of online video ad revenue. Meanwhile, professionally-produced videos command the other 96% of Web video dollars. Advertising in Web video should reach $590 million this year and hit $10 billion in 2013.
YouTube is slowing figuring this out. The key to success is to evove with the market not force it. I’m long on YouTube. They are the ‘next new network’.
Video works on the web and soon advertisers will figure out how to do it. Right now they are failing. Prerolls are the only game in town so we’re stuck with it for now.