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The Uncounted Web-Video Ads

Market Estimates Leave Out Product Placement

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Web video advertising may be plagued by some of the same squishy metrics that have bedeviled traditional television ratings for years. New problems in estimating the size of the market suggest that the supposedly quantifiable Web is in fact sometimes too difficult to quantify.

Some market research firms forecasting the size of the online video ad economy aren't counting money spent on brand integration and product placements.

Influential media research firm eMarketer recently revised its annual online video ad-spending numbers downwards by two-thirds to $505 million, citing a change in methodology. But neither its initial nor its revised projection accounts for money flowing into brand integration, product placement and host mentions in Web video.

"The share of the money going to product placement is a bit harder to gauge," said David Hallerman, senior analyst with eMarketer.

Mr. Hallerman pointed out that most TV ad spending numbers do not take product placement into account either. eMarketer measures pre-rolls and other ads that look like TV ads online. Mr. Hallerman said product placement should be counted, perhaps as a separate category.

"The medium may be more measurable, but ad spending isn't necessarily," he said.

That suggests the size of the Web video economy is being underestimated by the amount of ad dollars flowing into high-profile Web shows such as NBC-backed "Gemini Division," EQAL-owned "LG15: The Resistance" and Revision3's "Diggnation."

That's a problem because they generate most of their ad revenue from brand integration and host shoutouts, as do many Web studios including Next New Networks, Revision3, ManiaTV and For Your Imagination.

"The vast majority of revenue we derive for our shows are from brand integration," said Greg Goodfried, one of the executive producers of "LonelyGirl15" and its spinoffs, which have inked deals with MSN, Disney, Paramount and Procter & Gamble.
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