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Posted by Nate Elliott on April 19, 2010
Earlier this month, Corey Kronengold at Online Video Watch was complaining about the in-stream ad load at MLB.tv. But unfortunately for Corey – and for the other two-thirds of US Internet users who now watch online video – the ad load seems likely to get heavier rather than lighter.
In the fourth quarter of 2009, my team and I spent at least 30 minutes watching video on each of 84 leading sites in the US and Europe to better understand how marketers and sites are deploying online video ads – an exercise I’ve conducted each of the past three years. What did we find? Advertising, and a lot of it. In fact, 85% of US web sites and 64% of European sites now accept in-stream ads. And we saw more advertising per online video hour than ever before.
But the growth in overall video ad volume is coming not just from more sites accepting in-stream ads, but from the increased number of ads per video they’re running. Until recently, I’d rarely seen sites run more than one pre-roll in front of a single video clip, or run more than one ad in each ad break. But both practices have quickly become commonplace. If Corey didn’t like one ad in front of every clip on MLB.tv, I wonder whether he’d have enjoyed our experience on FoxNews.com, which actually showed us more in-stream ads than video clips. Likewise, ComedyCentral.com now puts two pre-roll ads in front of each full episode of ‘The Daily Show’ and ‘The Colbert Report.’ In the UK, ITV.com regularly attaches both a pre-roll and a post-roll to each short video clip – and often features a third marketer as the sponsor of the video player itself. ITV’s full-length online content is bolder yet, typically sporting two pre-rolls and up to four in-stream ads per ad break. And ProSieben.de in Germany ups the ante furthest of all, running as many as six (yes, six!) ads per break during ‘Germany’s Next Top Model.’
All of these examples have two important things in common:
So what does this mean to consumers, and to the industry? It means the online video ad load will only continue to rise – especially on premium content. I’ll be shocked, for instance, if Hulu doesn’t start running multiple ads per ad break once their sell-through goes up. (Or even sooner, using PSAs and network promos.)
Increasing ad loads further is definitely a gamble. After all, we know users aren’t exactly in love with in-stream ads. But we’ve also seen, over time, that users understand the quid pro quo of advertising in exchange for free content -- and that they're especially understanding when that content is something they really want to watch. Case in point: ProSieben reports that their user abandonment rates don’t increase much when they put more ads into each ad break – even when they show six ads in a single ad break. And that is the best news that publishers could hope to hear.