Ads on demand

Online VOD ad-spend grows, but is the money coming from TV budgets?
Advertising, Jamie estrin, Tv budgets, Video on demand, VOD, Web tv enterprise, Analysis, Delivery & Transmission

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Online video advertising is set for continued growth as media planners commit an increasing proportion of their spending to the medium, although much of this money could be drawn directly from TV budgets.

The most recent instalment of Web TV Enterprise’s online video advertising report in the UK has found continued growth in the use of web-based video advertising.

The bi-annual survey of media buyers found that 41.5 percent of respondents were using online VOD-based advertising to deliver incremental reach to TV campaigns. Less than 12 percent identified brand awareness as the main goal of this advertising. None of those surveyed said that the sole aim of their VOD ad purchases was to gain a direct response.

When asked what proportion of the media plans they were currently working on included a VOD element, 62 percent of respondents said half or more. Almost one third of those asked said that 75 percent or more of the plans they were drawing up at present included a budget for spending with online video services.

“The size of the audience now engaging with web video – short- or long-form – offers TV advertisers significant reach on the web,” says Jamie Estrin, managing director, Web TV Enterprise. “Combine reach with the ability to target specific audiences, channels and content environments and it is no surprise that TV advertisers are allocating more spend to online VOD.”

The frequency of these web-based on-demand campaigns has also increased with half of VOD buyers claiming to have run between five and 20 campaigns during the past six months. The previous edition of the survey found that only 40 percent of media buyers had run between one and five campaigns in the previous 18 months.

Another positive indicator for the future of advertising based around online video library services was signalled when media buyers were asked how much they expect this spending to grow during 2010.

An impressive 76.3 percent anticipated a growth in the allocation of spending for VOD of upto 50 percent or more (including 13.3 percent who said more than 50 percent). Of those remaining, 22.2 percent expected it to remain the same and only 1.5 percent thought it would decrease.

Despite the optimism surrounding the format, there remains several significant barriers to entry.

As with the previous survey, the most significant of these problems is the lack of measurement available to quantify the effectiveness of the medium. The size of the audiences available was noted as problematic by nine percent of the respondents and the ability (or lack of) to target this audience was identified as a barrier by ten percent.

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