Wired wrote a great article that sums up many of the ideas we’ve been discussing on this blog for some time. Without belaboring the point, our position has long been that video consumption patterns are shifting, and advertising is shifting with it. Among the key points it makes:
1. People are watching more content on mobile devices: “… (T)he amount of video watched on tablet devices and mobile phones in 2012 increased by 100 percent over the previous year.”
2. Advertisers are following them: “… (A)dvertisers are taking notice of the shift to online video viewership, with U.S. ad spending on streaming video content climbing 46 percent to reach $2.93 billion last year alone.”
3. The result is more accurate data: “With more and more viewership migrating online, real-time data from streaming content offers advertisers a much more accurate picture of how the audience is interacting with ads. Rather than simply relying on overall viewership numbers as a “proxy number” for how many people watched an advertisement, advertisers can tell whether they’re skipping an ad, or whether they’re not.”
4. The money will follow: “Faster internet, more content, and more devices capable of streaming high-quality video have created a larger and still-growing audience for streaming video.” More viewers = more money, either in ad dollars or subscription revenue.
And then there’s the money quote from Jim O’Neill, a media research analyst with Parks Associates:
I think that the traditional business model for advertising on television is being turned over. It hasn’t reached the end of its life yet, but the business model is going to change, and the amount of choice online will mean that [marketers will] have a smaller, but more loyal, audience watching their content… I have two sons who just graduated from college, neither one of them has ever been connected to a cable system. They’re connected to the internet, and they watch everything on their tablets or on their laptops. They prefer that experience, and they are the ‘Never Were’s who really worry cable providers more than cord-cutters.
It’s worth reading the whole thing. Check it out here.