There's a lot of excitement about online, ad-supported access to TV programs (accessible on the TV networks' own sites or via Hulu), but a new study from ad manager FreeWheel being released this morning shows that in reality, short-form content and 3rd-party syndication are the workhorses of online video advertising.
For the first time, FreeWheel breaks down its data by "Linear + Digital" content providers (i.e. TV networks like Fox, NBC, etc.) and Digital Pure-Play (online-only content providers or aggregators like VEVO, AOL, etc. that mainly focus on short-form content). FreeWheel found that video views grew 30% in Q1 '13 vs. a year earlier, driven by a 47% increase in views from DPPs, which offset a surprising decline of 8% by L+Ds. The data is based on 16 billion video views in Q1.
For DPPs, 86.2% of their views are short-form video, under 5 minutes. Somewhat counter-intuitively, despite their long-form TV programs, L+Ds had an even higher percentage - 86.7% - of their views from short-form, with just 6% from long-form.
DPPs rely heavily on syndication to drive their growth, with 84% of their videos views coming from 3rd-party sites. This compares with 25% for L+Ds, up from 17% a year ago. FreeWheel notes that L+Ds are still heavily focused on viewership growth through their own properties. As VideoNuze readers know, for years I've been writing about the power of syndication to drive online video usage.
L+Ds and DPPs each account for about half of Q1's video ad views. However, DPPs' ad views are up 43% in the past year, while L+Ds' are up only 5%. Combined, this resulted in a 22% increase in ad views year-over-year. L+Ds' long-form content affords more ad insertion opportunities (pre, mid and post-rolls), while DPPs' short-form is mainly supported by pre-rolls. L+Ds have increased ads per long-form video to 9.5 in Q1, up from 7.4 a year ago, but essentially flat over the past 4 quarters. Yet over 48% of L+Ds' ad views come from short-form videos.
L+Ds do a better job monetizing their short-form videos than do DPPs, with almost all L+D short-form videos having a pre-roll and only half of DPPs' having one.
Also noteworthy is mobile and connected device growth. FreeWheel found that 19% of Q1's video views were off the desktop, up more than 6-fold from a year ago (3%). Further, Apple's iOS devices drove 70% of mobile/tablet views.
FreeWheel notes that going forward, in order to attract demand from TV ad buyers, both L+Ds and DPPs need to optimize the mix of short, mid and long-form content, increase ad loads, and grow audience scale via syndication. One other thing I'd add is that for long-form volume to increase substantially and transiiton online video from a short-form medium, it is essential that TV Everywhere roll out at scale, which would unlock a ton of new long-form video ad inventory.
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