Looking for evidence that the online video ad market is tightening

Daisy Whitney’s New Media Minute is out this week and in addition to discussing the basics of fair use (a supposed “safe harbor” in the world of YouTube video production that won’t, in fact, turn out to help as many people as hope it might), she opens with a brief discussion of how online video producers are starting to back away from producing online videos on spec. Instead, they want advertisers signed up from the get go — the way that Electric Farm Entertainment (EFE) NBC produced the NBC-distributed non-hit Gemini Division, for example. (Amended to reflect Brent’s comments below,5 Feb).

See Daisy’s video below for more details. This could mean the market is maturing. It could also mean the market is getting tougher and people don’t want to spend in hopes of later payoff. For my part, this is causing me to finally step out and address the big question that has been hanging over online video since the market crashed in October: Is the market for online video advertising tightening? Are advertisers — once eager to spend a 50% premium on a CPM basis to reach ABC.com or Hulu.com audiences — going to pull back from this medium simply because cuts are coming across the board? I say this in an environment where broadcasters expect a bloodbath on the upfronts later this year — the same upfronts where a lot of online video sponsorships are presold (think Sprint + Heroes). 

It’s time to collect the evidence. What are you seeing? What conversations are you party to where people are cutting back on online video? Or are you hearing people get smart about it and realize that an online buy is still less-cluttered and more-targeted than other TV buys? I’d love to hear specifics, anonymous or not. Have at it.

Vodpod videos no longer available. 


5 Responses to Looking for evidence that the online video ad market is tightening

  1. Manfred says:

    After talking to some friends who work mainly with ad placement and brand strategy, it seems to me that there is still a lot of confusion about online video and online video ads. Considering the different strategies – creating your own videos / product placement / just ads – companies are still trying to figure out how they want to use online video.

    Either way, confusion is here to stay for a while so it’s great to be part of the discussion.

  2. Brent says:

    James —

    Just wanted to clear up three points on your otherwise strong post: 1) NBC did not produce Gemini Division. The show was produced, and is wholly owned, by Electric Farm Entertainment and distributed online domestically by NBC Digital. 2) Not sure how you define a “non-hit” but, even with its high budget, Gemini was still profitable for EFE and, when the show is eventually rolled out internationally by Sony, we fully expect 25+ mill views, in the range of our first webseries, Afterworld. 3) At EFE we are not backing away from anything. In fact, we are doubling our production slate over the next year.

    Hope this helps inform the ongoing discussion,

    Brent Friedman
    Co-Founder, Electric Farm Entertainment

  3. James McQuivey says:

    Brent, have to admit you were kinder than you might have otherwise chosen to be in response to my “non-hit” jab. In response to your comment, I removed non-hit as 25+ million views is certainly respectable. It does lead to a great question — how do we measure whether something is a hit or not in Internet-land? I may reach out to you on that topic. Thanks for your corrections.

  4. louise says:

    A good quality video that complements your site, provides information or encourages people to click through to a purchase or to contact you – is always in demand. Huge budgets on video advertising, expensive virals etc are being cut back on.


  5. […] TV show ads in peril? A few weeks back I asked you for evidence of whether online advertising was showing signs of growing or shrinking. I got some feedback, but none of a smoking gun. Then I spent a few sick days watching a lot of […]

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