Are Advertisers Spending Too Much On Online Video?

The Data Says Web Video Viewership Is Still Very Low

By Published on .

Based strictly off hype, one might think web video was taking a big chunk out of TV viewing. But the data says not-so-fast: web video accounts for just 2.3% of total TV viewing, according to an analysis of Nielsen's "Cross-Platform" report released this week.

That number includes the dominant purveyor of traditional web video, YouTube, as well as TV streamed on the web by the likes of Hulu and Netflix.

"Most people focus on a narrative that is frankly wrong," Mr. Wieser told Ad Age in an interview Tuesday when asked about the discrepancy between perception and reality regarding online video.

"The industry is in a bubble," he said, noting that the average American watches multiple hours of television a day, something that those on Wall Street and Madison Avenue -- where such TV watching behavior is likely not as prevalent -- are less likely to talk about. That said, while some experts might lead one to believe otherwise, video consumption is not hastily moving from TV to the web just yet.

Yet web video is expected to take $4.12 billion in ad dollars in 2013 according to eMarketer, nearly 6% of the total ad dollars allocated to video on TV and the web, meaning the web is over-indexing when it comes to the $70.46 advertisers are expected to invest in combined TV and video this year.

Mr. Wieser's analysis looked at a set of key Nielsen findings including the number of people consuming video content online and those consuming it on television. It also looked at the average amount of time Americans spend on each medium. Nielsen found that over 282 million Americans watch an average of over 146 hours of television each month, or just under five hours each day per person. But, when it comes to desktops, only 146 million watch video there, and they spend a grand total of just six and a half hours doing so each month.

The numbers do not include tablet video consumption, which Mr. Wieser states "should add significantly to this amount." And, the figures are being put forth by Nielsen which, it should be noted, has an interest in seeing robust television performance given its reliance medium for business. Still, the numbers are likely troubling to those counting on an uptick in video consumption time shifting online.

Dave Morgan, an ad-tech entrepreneur who left the online advertising industry to pursue opportunities in television, told Ad Age the sustained dominance of television is no surprise to him, and a reason he left for TV in the first place. "This is a bet I made,' Mr. Morgan said. "I didn't believe that viewing behavior was going to leak away from the TV set."

Yet video ad budgets are fast-growing as advertisers look for ways to reach young people who aren't watching the tube. eMarketer expects a 39% increase in advertiser spend on digital video in 2014, compared to a 3.3% increase in traditional TV spending.

But Mr. Wieser concludes that Facebook and Google will need to focus on non-TV budgets to "generate the growth that many investors expect from their online video initiatives."

Mr. Wieser noted that trends over time are hard to measure given a processing error in Nielsen's 2012 data that makes year-to-year comparisons difficult. But, he told Ad Age, since he started tracking the same data points in 2006, the needle has moved very little.

Most Popular
In this article: