Marketers, Those Digital Deals Have Paid Off

Online-Video Viewership Jumps 18% in Seven Months

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LOS ANGELES -- For the host of web companies and advertisers launching online branded-entertainment programs, a report from ComScore confirms their money's in the right place: The online-video audience is skyrocketing -- it rose 18% between October 2005 and May 2006.
Research firm ComScore has launched a new service of that tracks online video consumption of both content and advertising along with demographic characteristics.



That's also good news for an increasing number of marketers who have turned to producing their own short films or web series as a form of branded entertainment to reach consumers not interested in traditional advertising -- and for brands that are integrated into traditional TV shows whose networks are now using websites as new outlets to distribute their shows.

3.7 billion video streams in March

According to ComScore Video Metrix, a new service of the Reston, Va.-based research firm that tracks online video consumption of both content and advertising along with demographic characteristics, consumers viewed 3.7 billion video streams in March and slightly less than 100 minutes of video content per viewer per month, compared to an average of 85 minutes in October. Those consumers are fairly evenly split among gender -- although the average male watched nearly two hours of online video per month vs. an estimated one hour and 20 minutes over the same period for females, a stat that's key for marketers seeking out the young male demo with their messaging.

The ad dollars are clearly following that audience: The broadcast networks are expected to close their upfront negotiations with an estimated $8.95 billion in ad commitments -- down from last year's $9.1 billion in part due to advertisers who are reallocating budgets form TV to the internet and other digital-media platforms.

Reveille's Ben Silverman recently took part in an MSN/ANA panel discussion on pop culture in a digital age and has inked an online programming deal with MSN. He said it's easier for brands to get involved at the production level in the online space.

"[In TV] I'm not asked or wanted at the [ad sales] table," he said. If he had more information about the brands advertising in his shows, he'd be able to come up with a better portfolio of ideas for them. Since he signed a distribution deal with MSN, he's been invited to the table to talk to the marketers. "That's what will get us into this [digital] world more quickly."

AOL, Yahoo and Google are also developing slates of original web series that will integrate advertisers into the programming. Amazon.com has already launched the weekly TV-like talk show, "Fishbowl," hosted by comedian Bill Maher.

ComScore's findings

The ComScore report provides advertisers with a daypart and demographic breakdown of the internet's viewing audience: Males aged 25 to 34 watch the most video on the internet, viewing an average of 140 minutes per month. ComScore also found that nearly 16% of all time spent viewing online video takes place during prime-time hours, while 22% occurs on the weekend. Consumers spent close to one hour viewing internet video from work in March.

Also, 42% of internet users in the U.S. are finding their online videos through an entertainment web site, while 33% of them used portals to locate the content.

What they're watching specifically wasn't disclosed in the study.

But the increase in online viewership comes at a time when video-sharing sites are attracting millions of visitors. YouTube alone lures 13 million unique visitors every month to its library of random clips, and NBC buried the hatchet with the site to broker a deal to promote its programming there. Fox is teaming with corporate sibling MySpace.com, the popular social-networking site that has hit 50 million users, to promote its programming. ABC has been offering free streams of some of its prime-time shows on its own website. In the first month, it generated 11 million streams.

And consumers want to get online to watch this content: Broadband penetration among web users has reached 68%.

Marketers should take heed

Now it's time for marketers to start taking advantage of an online audience that's hungry for programming.

"Video consumption on the web is rapidly approaching the tipping point for advertisers," Peter Daboll, president-CEO of ComScore Media Metrix, said in a statement. He added that with increased use of broadband, "video consumption is poised to become a standard part of the online experience for a majority of consumers."

"Advertisers will increasingly seek opportunities to reach broad and frequently elusive markets," he said in the release, "and do so with a level of engagement and richness that has not previously been available online."
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