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Online Video Advertising The impact of broadband for brands online Bill Gash April 2005.

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Presentation on theme: "Online Video Advertising The impact of broadband for brands online Bill Gash April 2005."— Presentation transcript:

1 Online Video Advertising The impact of broadband for brands online Bill Gash April 2005

2 Broadband and brands Opportunity Timing Context Potential Audience reach Creative scope Cost efficiencies Targeting Conclusions Examples Broadband will transform the online advertising industry as surely as colour transformed TV. It creates new, vibrant and effective advertising opportunities for brands to engage consumers. Combining the power of video with the interactive attributes and measurability of online. It offers new cost efficiencies in audience delivery and in the production and use of video assets. It can dramatically enhance the effectiveness at brand communication. And it allows brands to respond to the long term deterioration of linear, broadcast TV as new technologies, fragmentation and viewer control undermines its historic strength as a medium.

3 The opportunity Online advertising is the fastest growing ad medium, worth $2.3bn in Q1 2004 (Source PwC) Predicted to be worth $14.8bn by 2008 (Source Jupiter) Video streaming / rich media likely to account for $5.8bn (Source Jupiter) Brand advertising increasing as a share of the total, to 45% by 2006 (Source EIAA) This presentation aims to explain why broadband will make online advertising a ‘must have’ media for brands A video medium, offering reach, cost efficiencies and improved ad performance is worth looking into

4 Broadband has critical mass 6m UK homes have broadband Now used by 57% of all UK users It is having a significant impact on web usage Users spend twice as much time online (13hrs v 7hrs per week (NOP)) Users view more web content Downloading/watching video is a key activity for broadband users Brands can now use video to engage online audiences using new or existing assets

5 The context Broadband comes of age Broadband is growing faster than any other medium 274m users worldwide by 2008 50% of European HH by 2006 Growth facilitated by Shared network access / LLU Competitive pricing / packaging Faster connections Bundling (BB +DTV+Tel+VOD +VoIP) TV viewing falls significantly in broadband households 56% of users spend less/lot less time watching TV Most pronounced among young users /

6 The context TV market matures Digital TV Trends, more choice Platforms – cable, satellite, DTT, DSL Channels – 350+ (on Sky) Fragmenting / diminishing audiences Viewers more fickle, elusive, less loyal Broadcasters Reliance on blockbuster shows Have to deliver, impact on scheduling BARB research, lacks depth Increasing viewer control Growth of PVRs (640,000 Sky+ STBs) Research confirms time-shifting, ad skipping is endemic in PVR households

7 The potential Audience Using video advertising online to: Extend reach - to incremental audience among online users Increase frequency – using online advertising, consistent with TV to re-enforce brand messages Up weight - to light/non TV users, elusive young adults, older males

8 The potential Creativity Exploit the broadband users enthusiasm for video content Create new, innovative uses for video content Make effective and cost efficient use of existing video assets Develop multiple purpose video assets capable of being deployed over multiple devices TV, PC, Mobile This is not just another way to use a 30 second spot Create memorable, impactful advertising that transcends the online / TV medium divide

9 The potential Cost Efficiency Online video creates new cost efficiencies Online audience CPMs are below equivalent TV GRPs Reducing campaign CPMs, increase ROI Media Multiplier effects Improves reach and frequency Allows cost effective up-weights Re-enforce messages to key audiences Using online video can Ensure consistency between mediums Reduce production cost, improve ROI, Prolong campaign sales effects

10 The potential Targeting Video advertising online makes for ‘joined up’ marketing Creates a clear visual link between the TV campaign and the brand’s web site Allows for far more precise targeting with contextually relevant web sites Gives the TV viewer the means to view the commercial, off air, on- demand, to interact and engage At a time and place of their choosing Allows them access to a richer experience beyond anything possible with TV today

11 Media commentary According to Dynamic Logic’s MarketNorms® database, online ads using audio and video achieve greater impact on Brand Awareness on lower frequency exposure than other standard online formats, by typically 10 % points (Source Dynamic Logic Jan 2005) Combine the power and emotion of video, the direct response and tracking capabilities of the Internet and the ability to combine long form video content, audio and interactive games and you’ve instantly taken interactive marketing to and entirely new level (Karin Sanjabi – EVP Carat Interactive US) Pfizer claim an independent study conducted by Millward Brown indicates streaming online video ads ‘are equally as effective as television’ in creating brand interest, communicating a distinctive message and influencing viewers Pfizer Extends Campaign on MSN Video Nov 2004

12 Conclusions Broadband… Changes Internet usage and behaviour - more time spent, sites visited, video viewed Impacts on the time spent with other media, especially TV Makes video attractive to users - faster speeds = faster delivery, better quality, more immediacy Makes video advertising attractive to brands - critical mass, reach, targeting, measurability, quality of experience Creates a new channel for delivering video content to engage consumers and communicate brand messages

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