Media Stream Ad Models Still Evolving
friday 9 march, 2007
Nearly 25 billion media streams were served in 2006, according to a new report by Accustream iMedia Research.
The study covered all entertainment and media sites, including ad-supported and subscription services, but excluding user-generated video delivered by progressive download.
The average user consumed 10.6 streams per month per site (excluding streamed video ads) in 2006. This was actually an 11% decline from 2005, thanks to increased competition among content providers -- people went to more sites but consumed fewer streams on each.
Music videos comprised 36% of total streams served; news streams comprised 24%.
Streaming increased because there was better content to watch in 2006, according to Paul A. Palumbo of AccuStream. He also credited "old-fashioned syndication relationships with aggregators who can deliver audiences and began to populate emerging distribution platforms. Moreover, a growing base of high speed users and the adoption of Flash propelled the market."
A study by Insight Express conducted for Advertising.com in January 2007 confirmed news and video as the most appealing types of content for streaming.
Ads pay for some of the premium content that drove streaming growth last year, but eMarketer senior analyst and streaming video specialist David Hallerman stated that the market for streaming ads may have built-in limits.
"The current video ad inventory shortages both create higher CPMs and hold back a fuller flourishing of this market," said Mr. Hallerman.
According to a 2006 Deutsche Bank report, 90%-plus of pre-roll inventory is typically sold out. A June 2006 McKinsey & Co. report indicated a "severe supply bottleneck" for Internet video advertising, with 80% sold out in 2005. "Assuming that marketers don't increase the number of ads they place in each video stream, the maximum supply of video ads is currently about $600 million a year -- far less than future demand," noted the consulting firm.
These shortages come despite higher CPMs for streams than for some other ad types. Andy Ellenthal, senior vice president at PointRoll, told eMarketer that in-stream (such as pre-roll) carries a CPM from $30 to $90, while in-page ads have a CPM from $3 to $15.
Still, pre-rolls may not be the best way to reach streamers. Forrester Research has noted that online users aren't anxious to integrate commercials into their video-viewing experience. Over 80% of the online video viewers polled by Forrester said that in-stream ads were "annoying," and 75% claimed they ignore them.
Less-intrusive advertising, such as placements alongside video, scored somewhat better, with 50% of respondents saying they were acceptable. Text links were most preferred, with only 19% of respondents finding them annoying.
Source: eMarketer
