Report: Ads Mustn’t Undermine Internet Video

U.S. broadband households watch an average of 3.8 hours of Internet video on TV screens per week — 20% of all video seen on these devices.

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This represents a tremendous opportunity for advertisers, according to a new report, Tracking Eyeballs: Video Analytics and Measurement, by industry research firm Park Associates. Park Associates forecasts total digital video advertising revenue will increase from $14.4 billion worldwide in 2016 to $28.9 billion in 2020.

The total number of OTT (Over-The-Top) video services, the report also noted, has tripled from 2010 to 2015.

That ad revenue potential of Internet video, however, could be undermined by a bad viewing experience, Park Associates warns.

“As Internet video viewership on the television screen increases, advertisers are seeking to leverage prime living room real estate in this new media model,” said Glenn Hower, research analyst, Parks Associates. “Content and OTT providers and advertisers need to ensure their methods do not interfere with the viewing experience, which would otherwise drive viewers to ad-blocking technologies.”

Separately, in its new State of Online Video report, Limelight Networks found increasing acceptance of advertising in online video, especially among millennials (ages 18-35). Compared to previous surveys, more millennials (35%) were all right with online video ads, especially if that meant free access to content. Nevertheless, almost 58% of millennials find ads to be disruptive.

Limelight also found that the growing prevalence of streaming video services is helping to drive cord-cutting (the canceling of cable or satellite subscriptions).

The report said 69% of consumers – and 80% of millennials – now subscribe to at least one OTT service. Millennials are also 7% more likely than in previous surveys to opt for Internet television and cancel pay TV subscriptions when direct channel subscriptions are available. Also, smartphones are now the dominant device for watching online videos among this demographic, although smartphones are also becoming more popular among the general population as well.

“Our research continues to show increasing adoption of OTT content, especially among younger consumers,” said Nigel Burmeister, vice president of global marketing at Limelight Networks. “Consumers are demanding access to content when they want it, using the device of their choosing. Traditional providers and delivery models are increasingly at risk of being left behind as consumers become more savvy.”

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About Larry Greenberg

A former local beat reporter and film critic, co-founder Lawrence Greenberg has more than 25 years’ experience as a writer and public relations executive.

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