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Media companies and advertisers are bullish about the rise of online video, with the majority of publishers predicting higher future CPMs and most advertisers envisioning greater spend effectiveness, according to "Optimism Despite Unresolved Issues About Video Advertising," a December 2013 commissioned study conducted by Forrester Consulting on behalf of Videology.

However, despite this general optimism, advertisers, agencies, and media companies differ on the benefits of online video and exactly how the medium will evolve over the next few years.

For example, respondents from media companies and agencies are optimistic about TV viewers' interacting with supplemental content on a second screen, whereas advertisers are skeptical, especially about the likelihood of consumers' engaging with ad-related offerings.

Another gap is apparent in describing the advantages of online video: Advertisers say they are attracted by the promise of targeting and better communication, whereas their agencies see a greater benefit in the medium's interactivity and improved audience attention rates.

Overall, large majorities of respondents across all three groups say video viewing will continue to shift to streaming sources, but media companies and agencies see a major move to Web-based viewing whereas advertisers are more optimistic about on-demand services from cable and satellite providers.

Below, additional key findings from the study, which was based on data from a survey of 150 US and Canadian decision-makers at media companies, advertisers, and advertising agencies.

Ad Planning and Buying

  • 63% of advertisers say the ability to buy online video ads programmatically will soon become important, and more than 70% of agencies and media companies agree.
  • However, all three groups also say the ability to buy ads on specific programs and to work directly with media companies will also remain important, indicating that traditional video ad purchasing techniques will not be abandoned anytime soon.
  • Most agencies and advertisers expect the current separation between digital video and TV planning to disappear in the next three years, but views differ on whether digital or traditional agencies will then take the lead.

Challenges

  • Advertisers say their top two challenges with online video are measuring audience across a range of devices and understanding cross-platform behavior.
  • Media companies worry about these issues, too, but they also fret over managing a myriad of technologies and building capabilities to target individual viewers.

About the research: The study was based on data from a survey conducted in September 2013 of 150 North American advertising decision-makers at media companies, advertisers, and advertising agencies.

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ABOUT THE AUTHOR
image of Ayaz Nanji

Ayaz Nanji is a digital strategist and a co-founder of ICW Media, a marketing agency specializing in content and social media services for tech firms. He is also a research writer for MarketingProfs. He has worked for Google/YouTube, the Travel Channel, AOL, and the New York Times.

LinkedIn: Ayaz Nanji

Twitter: @ayaznanji