Branding dollars spent on TV ads should shift to online video ads for several reasons: 1) Online video ad load is 5% while TV ad load is 23-30%, allowing users to see fewer ads online. 2) Users pay more attention to and skip online video ads less than TV ads. 3) Advertisers only pay for online video ads that users actually watch through to completion. 4) Online videos can better measure user interaction and follow-on actions than TV ads.

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Dr. Augustine Fou
http://linkd.in/augustinefou
May 2014
Video Ad vs TV Ad
Spending 2014

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Executive Summary
Branding dollars spent on TV ads today should
shift to online video ads for the following reasons:
• Online video ad load is 5% while TV ad load is 23-30%
• Users pay more attention to, and skip less, online videos
• Advertisers can pay only for ad views that users don’t
skip - TrueView (guarantees they watched entire ad)
• Online videos can measure interaction and follow-on
actions – true[X]
• Online videos are proven more effective on all recall
metrics

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Device Reach /
Time Spent

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Device Reach
Source: Experian 2014 Digital Marketer Report

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Device Time Spent
Source: Experian 2013
Digital Marketer Report
Mobile
phone, home
computer, and
work
computer
time spent
exceeded
television
time spent in
2013 report

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% of Video Time
Source: Nielsen Cross
Platform Report March 2014

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Consumer Media Time 2014
TV – 4.5 hrs per day
Internet – 2 hrs per day
Video – 26 mins per day
Source: Nielsen Digital Consumer Feb 2014

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Time Spent with Video
Implies 0.5 hrs
(30 mins) per day

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Time Spent with Video
1,067
minutes
per month
is the
same as
17.8 hrs
per month
or
36 mins
per day

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Time Spent with Video
1.0 hrs
(55 mins) per day
implies
30.0 hrs per month

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Ad Load
Comparison

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Video Ad Load
5%

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Video Minutes and Ads
Source: comScore April 2014 press release
Viewers watched 1,067
minutes of online video in
March 2014 (17.8 hours/mo
or 36 mins per day)
Video ads were in 61.6 percent
of all videos viewed and 5.4%
of all minutes spent viewing
video online
March 2014 Data

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TV Ad Load
23 - 32%

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Network TV Ad Load
30% ads
• For every 30 minute episode,
there are about 9 mins of ads (or
10 – 12 ads ) – used How I Met
Your Mother as proxy
32% ads
• For every 60 minute episode,
there are about 19 mins of ads (or
20 – 24 ads ) – used 24 as proxy

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DVR Owners Watch 23m
Source: Nielsen Dec 18, 2013
DVR owners watch 23
mins of 30 minute episodes
Source: Netflix

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DVR Penetration 7 in 10
Source: LRG via MarketingCharts Dec 2013

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Key Metrics (March 2014 data)
Total ad minutes March 2014 = 10.86B
Total video minutes March 2014 = 200B
Total unique viewers March 2014 = 187.8M
Ad Minutes per Unique Viewer = 58 mins per user
Ad Mins per Unique Viewer per Day = 2 mins

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TV vs Digital
Comparisons

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In 2013
Digital marketing was $42B
Broadcast TV was $40B
Cable TV was $34B
TV vs Digital Ad Spend
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Source: IAB Full Year 2013 report

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TV is $69B Digital is $48B
TV vs Digital Ad Spend
TV DigitalPrint Radio
Out-of-Home $8 (5%)
Other $2 (1%)
$75 billion
42%
$43 billion
24%
$32
18%
$17
10%
Display
$8 billion
19%
Search
$18 billion
43%
Video $3 (7%)
Mobile
$4B$3B
display search
17%
Other
$5
11%
Lead Gen $2 (4%)
• classifieds
• sponsorship
• rich media
Source: IAB Full Year 2013 report
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branding performance
$34B$40B
broadcast cable

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TV Ad Spend Growth
Source: Kantar Media, Dec 2013

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Digital video is 7% of digital
ad spend
Digital Video Format Share
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Source: IAB Full Year 2013 report

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U.S. Video Ad Spending
U.S. Video
ad spending
to reach
$6B in 2014
Source: eMarketer March 2014

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Video Ad Views Exploded
Source: comScore Feb 2014 via Marketing Charts

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60% Video ad CPMs are in the $8 - $12 range
Video Ad Global eCPM
Source: Turn, October 2013

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Using their databases, they came up
with a 2013 average CPM for online,
in-stream video ads of $23.03. That
seems on the high side in my opinion
and they say it is 38% higher than the
average 18-49 CPM for prime time
cable TV. Meanwhile, network TV was
almost double that of online in-stream
video ads at $44.11.
Network TV CPMs
Source: SQAD via ReelSEO March 2014
Network TV
$44 CPM
In-stream Video
$23 CPM
Cable TV
$15 CPM

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Broadcast TV $20 cpm
Cable TV $18 CPM
Radio $5 cpm
Magazines $20
Newspaper $35
Out of Home $4
Internet $11
Direct mail $40 CPM
Comparative Media Costs
Cost per Thousand (CPM): Cost to reach 1,000 users or impressions
Source: OAAA, 2011
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Video Ad Formats (length)
Source: tnooz.com Feb 2013

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Percent of digital allocated to video ads
- 14.5% auto
- 12.3% Entertainment
- 11.1% retail
- 9.2% CPG
- 6.9% financial
Percent of Digital to Video
Source: AdoTube via MarketingCharts March 2013

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Users Pay More Attention to
Online Video Ads than TV Ads
Source: May 2011 report from
YuMe and IPG Media Lab

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Why TrueView is Awesome
• Advertisers only
pay if ads are NOT
skipped (pay for the
15%)
• Ads are on Youtube,
which has the
industry-leading
LOWEST amount
of fraud and highest
amount of real
human audience

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Dr. Augustine Fou – Chief Digital Strategist
“As more users shift their consumption
online, TV advertisers should more
rapidly shift ad spend to digital video as
well, to achieve a variety of benefits and
advantages such as more real-time
feedback and conversion metrics.”
FORMER CHIEF DIGITAL OFFICER, HCG (OMNICOM)
MCKINSEY CONSULTANT
CLIENT SIDE / AGENCY SIDE EXPERIENCE
PROFESSOR AND COLUMNIST
ENTREPRENEUR / SMALL BUSINESS OWNER
PHD MATERIALS SCIENCE (MIT '95) AT AGE 23
@acfou
ClickZ Articles: http://bit.ly/augustine-fou-clickz
Slideshares: http://bit.ly/augustine-fou-slideshares
LinkedIn: http://linkd.in/augustinefou

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APPENDIX

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Time Spent with Media
TV
- 134 hrs/mo (4.5 hrs/day)
Browser/Apps on Smartphone
- 34 hrs/mo (68 mins/day)
Internet on Computer
- 27 hrs/mo (54 mins/day)
Watching Video on Internet
- 7 hrs/mo (14 mins/day)
Source: Nielsen Digital Consumer 2014

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Source: Experian Marketing Services
Mobile still has a long way to go before
it can compete with television for time
spent, however. Consumers today spend
just over an hour a day using their
mobile phones, or seven hours and 50
minutes a week, but they spend more
than three times that watching
television. In fact, nearly one-in-six
adults watch more than 40 hours of
television in a typical week.
Time Spent (per week)
Source:
Experian 2014
Digital Marketer
Report

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Time Spent on Internet
USA 7.6 hrs /day

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TV Time Trends (down)
Nielsen Cross Platform Report, March 2014

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YouTube Reach

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Time Spent TV vs Internet
In 2013 share of
time spent per day in
Digital
(314 mins or 5.2 hrs)
exceeded share of
time spent on
TV
(271 mins or 4.5 hrs)

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Time Spent TV vs Internet

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Time Spent TV vs Internet
Time spent online exceeded
time spent watching TV on
TV since 2009