Posted by James McQuivey on February 4, 2009
It's time to finally address the elephant in the room. I've been writing for several years about the power of online video -- specifically the catalytic effect of online TV shows -- to change consumer behavior and the TV consumption model. Then this recession got in the way.
We're busily examining the ways that this will effect everything we cover, whether devices, services and consumer sentiment. But one specific area I want to collect evidence on is the question of online video advertising. For the last year, the rise in spending has been tremendous. The rise of Hulu.com as a destination site as well as a video syndicator plus while a few minor things like YouTube finally tinkering with a viable (read: harder to litigate against) ad model and the rise of Hulu+CBS aggregators like TV.com or Fancast have meant a flood of new inventory, most of it premium.
But when an economy gets as bad as this one, the only thing more predictable than US Democrats trying to insert protectionist trade policies into a stimulus bill is that advertisers will cut ad spend across the board. This excellent and gritty piece from Broadcasting & Cable yesterday discusses the expected bloodbath in the US broadcast upfronts later this year. That has to affect online video ad spend, simply because a lot of online TV show sponsorship is presold in upfront bundles each year (think Sprint + Heroes).
The alternative view: You could argue that smart advertisers would use this time to really restructure their approach to advertising rather than simply make cuts across the board. A shift toward measured media, especially the low-clutter, high-engagement environment premium online video provides, could make a lot of sense. Assuming people can control the impulse to create the illusion of control by making what feel like reassuring cuts across the board.
Your turn: I want to collect evidence from you. What conversations are you involved in, what proof have you seen that online video advertising is falling, rising, staying the same, and more importantly, what rationales are people using to justify their actions? Add your comments, I'm eager to hear what you have to say.