Digital Video in 2016 – The State of the Market for Publishers

Brian Blondy, February 9, 2016

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In 2016, digital video content will become a publisher’s most essential and effective tool for engaging and monetizing the waves of traffic visiting their websites.

According to a study conducted by Cisco on global internet traffic and the trends pushing forward in the coming years, consumer internet video traffic is expected to account for 80 percent of all consumer Internet traffic online in 2019.

Video content is so much more visually dynamic than simple textual content in how it creates an additional element of stickiness for visually pleasing and engaging users, and as a result, further lengthens website visits and overall consumption of content.

Though the clearest benefit deriving from creating and displaying video content lies in video’s ability to yield significant financial returns for publishers who pair the content with advertising. Eager advertisers are willing and ready to pay high CPMs to distribute their advertisements on the video content.

So if the benefits for having video content are clear, why haven’t more online publishers begun producing original video content in order to meet the surging demand of users and advertisers?  

The (Sad) Current Status Quo

Despite the clear benefits for having video content, unfortunately, a vast majority of publishers are not creating original videos and showcasing them exclusively on their websites. This is because very few publishers have been able to meet user’s demand due to the lack of editorial, technological and/or financial resources on hand essential to developing original video content.

In the meantime, typical video solutions that enable publishers to present and embed someone else’s video content onto their websites, i.e., YouTube, do not offer publishers the ability to monetize the content as YouTube carries its own propitiatory monetization platform displaying 3rd party in-stream advertising.

While everyone is in agreement that YouTube content offers very high value to website users, the fact that publishers are not able to independently monetize the content from their own traffic severely limits the benefits of having the content on their website in the first place.

 

The Beauty in Monetizing Video (If You Have It)

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Video advertising is exploding on the market as high demand for publishers and advertisers to adopt video technology and to bring video advertising opportunities to mid-sized and premium advertisers is in full-swing.

What can be said with certainty is that if a publisher can produce original video content for their website, they will reap huge financial benefits by offering ads (pre-roll, mid-roll and post-roll) on their content to advertisers at high prices.

In an Adobe Digital Index report focusing on the trends in the programmatic video industry for 2015 states that 32% of all digital video ad spend was bought programmatically, making up nearly $2.91 billion in ad spend. For 2016, the figures are expected to almost double with online advertisers expected to spend $5.37 billion on programmatic video advertisement.

Clearly in-stream programmatic video advertising offers offline advertisers a strong opportunity to bring their advertising online in the same manner in which they currently advertise on television.

According to a 2015 report conducted by BI Intelligence, video advertising is clearly the king in the online advertising ecosystem. Online video advertising receives three times more clicks on average by users as compared to clicks responding to advertising on mobile, display, and rich media. The same report cites that video ads are clicked-upon 1.84% of the times.  This is a pretty astounding figure considering how prevalent display ads are as compared to video ads.

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Advertisers are waiting and eager for publishers to create content in which they can feature their advertisements. Clearly video is the preferred medium and the place where marketers are looking to strategically place their advertisements in content to be engaged.

 

Conclusion

Total Media believes that video should be an important part of a publisher’s playbook for 2016.  Video is the direction where media consumption is going, and it is the most popular venue for reaching the most desired demographics around the world.

Despite the inherent barriers to entry (logistics, costs, manpower, and speed) within the video production process itself, we are excited to announce that in the near future we will be offering an unprecedented solution which will alleviate the situation  publishers currently face in creating, developing and delivering high-quality, monetized video content to eager audiences.

From our view, what is really holding this large bloc of publishers back from having high quality, timely and engaging video content is that there is simply too much process.  We’re aiming to change that with an all-encompassing solution that both provides content and monetization in one package.  Stay tuned!

 

Brian Blondy is the Marketing Manager at Total Media.  You can contact Brian by email at brian@totalmediasolutions.com or on LinkedIn

 
Sources:
http://www.cisco.com/c/en/us/solutions/collateral/service-provider/ip-ngn-ip-next-generation-network/white_paper_c11-481360.html
http://www.cmo.com/articles/2016/1/6/15-mind-blowing-stats-about-digital-video.html
http://www.businessinsider.com/digital-video-advertising-performance-and-growth-trends-2014-8