Million Dollar Web TV News

Imagine – over 14 billion videos are watched a month now! This has transformed the very nature of Web content and calls into question everything we know about how Web sites attract, engage, convert, and retain audiences.

In order to deliver this massive river of content, sites have had to turn to specialized software and content delivery networks like Akamai, Limelight Networks and Panther Express. However, this raises the costs of content delivery, so publishers are looking for new methods of monetization. Foremost among these is video advertising: the delivery of either pre-roll or overlay ads that appear during video playback.

Unfortunately, results to date have been a HUGE disappointment. With CPMs heading through the floor, this is a dynamic that is unlikely to change in the foreseeable future. There are many reasons for the failure of “in-video” video advertising, but some of the foremost issues include: the dearth of monetizeable content, the high production costs of video ad creation, audience rejection of the format, and the resultant poor performance of video ads compared to other forms of advertising.

Assuming typical file sizes of 20-50 MB, CDN (content delivery network) pricing, and completion rates, it costs about a dollar for every thousand videos delivered. In order to offset these costs of distribution, research shows video viewership needs to generate a $1 CPM. In the case of in-video advertising, whose dominant forms today are pre-roll, post-roll, and overlay, that $1 is hard to come by. Because of completion rates, post-roll is a mostly ineffective form of advertising, and very few sites have the kind of content that makes possible persistent pre-roll ads without massive audience defection.

This leaves overlay, typically a form of PPC advertising delivered in a small pop-up within the video frame. Due to ad and content inventory constraints, typically no more than 50%, and often less than 25%, of all videos will display an advertisement. That means the true CPM has to be between $2 and $4, which is impossible to secure in today’s market.

As the market continues to develop, video advertising that commands both the spend of big brands and the attention of audiences may indeed come along. But that market is years away. In the interim, advertisers are best off going with the solution we provide: inexpensive, long term exposure of their videos on dedicated sites … like ours.

Thank you, Andy at InstaDocs for the copyright verification! Your video ad is back on-line and will stay there for good.

On a different note, we are starting to see a bit of pickup in inquiries … maybe the economy is about to begin improving. Or is it just spring awakening? We’ll know soon. Keep them coming, will you?!