Analysis for 'Forrester'

  • Study: 77% of Advertisers Plan to Increase Video Ad Budgets in Next Two Years

    More affirmation that advertisers and agencies are shifting spending to video: a new Forrester survey has found that 77% of advertisers and 70% of agencies plan to increase their video ad spending in the next 2 years. In addition, 73% of media companies plan to offer more video inventory to meet demand.

    The data is based on a survey Forrester conducted of 529 executives at advertisers, agencies and media companies in 8 countries, including the U.S., for a report commissioned by Teads.

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  • Forrester Forecasts Over $1 Billion in RTB Video Ads in 2014

    Forrester has updated its forecast for the real-time bidding (RTB) segment of the online video advertising market, calling for a 71% increase in 2013 spending to $686M and another 66% increase in 2014 to $1.14 billion (see chart below). Forrester sees the increase in RTB spending accounting for 44% of the overall growth in online video advertising between 2012 and 2014. The forecast is part of a commissioned report for SpotXchange, available here.

    Forrester points to 4 drivers of RTB's rapid growth: more diverse pricing mechanisms that will increase RTB's appeal, especially for premium publishers; greater acceptance of RTB for mid-flight optimization; media buyers' desire to compliment traditional reach and frequency campaigns with targeted, engagement-oriented RTB campaigns; and automated RTB buying (and programmatic in general) that will reduce friction in the complicated online video market.

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  • 4 News Items Worth Noting from the Week of July 13th

    Following are 4 news items worth noting from the week of July 13th:
    TV Everywhere survey should have cable industry clicking their heels - I wasn't at all surprised to read results of a new Solutions Research Group survey fielded to 500 Comcast and Time Warner Cable subscribers giving the concept of TV Everywhere positive reviews. As Multichannel News reported, in the overall survey 28% of respondents said the idea was "excellent" and 45% said it was "good." Digging in further though, among those 18-49 the "excellent" score surged to 80%, while 87% of Hulu and Fancast users approved of the idea. Unprompted, respondents cited benefits like convenience, remote viewing, getting better value from their cable subscriptions, watching on PCs in rooms without TVs and catching up on missed programs. My take: consumers "get" what TV Everywhere is all about and already have positive initial reactions, meaning there's very significant upside for the cable industry.

    Paid video forecast to surpass free - A Strategy Analytics forecast that got attention this week says that the global paid online video market will be worth $3.8B in 2009, exceeding the global free online video segment which will total $3.5B. I haven't seen the details of the forecast, but I'm very curious what's being included in each of these numbers as both seem way too high to me. The firm forecasts the two segments to grow at comparable rates (37% and 39%), suggesting that their size will remain relatively even. I suspect we're going to be seeing a lot of other research suggesting the paid market is going to be far larger than the ad-supported market as sentiment seems to be shifting toward subscriptions and paid downloads.

    Consumer generated video contests remain popular - VideoNuze readers know I've been intrigued for a while now about contests that brands are regularly running which incent consumers to create and submit their own videos. Just this week I read about two more brands jumping on the bandwagon: Levi's and Daffy's retail stores. NewTeeVee had a good write-up on the subject, citing new research from Forrester which reviewed 102 different contests and found the average prize valued at $4,505. I see no end in sight for these campaigns as the YouTube generation realizes it's more lucrative to pour their time into these contests than training their cats to skateboard. Brands too are recognizing the wealth of amateur (read cheap!) talent out there and are moving to harness it.

    MySpace has lots of work ahead to become a meaningful entertainment portal - The WSJ ran a piece on Monday based on an interview with Rupert Murdoch in which he was quoted as saying MySpace will be refocused "as an entertainment portal." That may be the winning ticket for MySpace, but I'm not totally convinced. MySpace has been in a downward spiral lately, with a 5% decline in audience over the past year, a 30% headcount reduction and an executive suite housecleaning. While always strong in music, according to comScore, its 48 million video viewers in April '09 were less than half YouTube's 108 million, while its 387 million video views were about 5% of YouTube's 6.8 billion. Clearly MySpace has a very long way to go to give YouTube serious competition. It will be interesting to see if the new management team Murdoch has installed at MySpace can pull off this transition.

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  • Forrester’s New Report on Paid Downloads: Right on TV Shows, Wrong on Movies

    Forrester released a new report last week entitled, “Paid Video Downloads Give Way To Ad Models”. Since I’ve had some requests to comment on it (and the paid video market as a whole), I’m weighing in here.
    I was able to read the full report, but if you can’t, then their press release is here. It provides the gist. In short, I think Forrester’s conclusion that “The paid download market is, however, ultimately a dead end” is mostly right regarding TV shows, but completely wrong for movies. Lately broadcast and cable TV networks have ramped up deals with many aggregators to distribute streaming versions of their programs. And with advertisers falling all over themselves to support these, it is certainly likely that the concept of paying to download and own a TV program is heading for a decline.
    However, when it comes to movies, it’s a different story altogether. First off, at a minimum, today’s $15+ billion/year home video market (DVD sell through only) more than demonstrates that people want to own certain content (i.e. mainly movies). This provides a pretty rich pot of revenues for paid downloads to tap for growth. Paid downloads (or “electronic sell-through” as some call this activity), hold the potential to be a far more efficient and flexible way to get content into the hands of those willing to pay for it. Granted there are some current usability issues (namely broadband-to-TV connectivity) to overcome, but these will certainly be resolved in the near future. Ignoring this dynamic (as Forrester does by neglecting to mention, even once, how it expects home video market to evolve in the digital era) is a significant omission.
    It leaves me wondering how Forrester thinks this vital revenue stream fits into its conclusions. Piggy-backing on this omission, the report also concludes (absent an explanation that I can find) that “Movie studios whose content only makes up a fraction of today’s paid downloads, will put their weight behind subscription models that imitate premium cable channel services." I think this conclusion is way off base. Studios love home video revenues. For many movies, home video revenues ARE the business model, long since displacing theatrical revenues as the main source of profitability. It’s inconceivable to me that, in the digital age, studios are going to move away from emphasizing a la carte purchases to instead take a share of a 3rd party’s monthly subscription revenues, as Forrester believes.
    That’s not to say there won’t be a place for subscription services (e.g. Netflix). But studios have rich e-commerce-based business opportunities ahead (fueled by all the merchandising tricks folks like Amazon have mastered in other product categories). These have been limited to date by lack of instantaneous product fulfillment (i.e. broadband-delivered downloads). On the cusp of pursuing these opportunities, to suggest that, instead, studios will forsake them for subscriptions, just doesn’t make sense.
    Finally, Forrester’s prediction that because “only 9% of online users have ever paid to download a movie or TV show”, there is unlikely to be a mass market for paid downloads, is very tenuous, given that broadband video delivery itself has only burst into the public’s conscious in the last year or two. Scant adoption of any new technology in its early days is a pretty unreliable indicator of future potential. For example, consider how few people owned a cell phone in the early days when they were expensive and brick-like. Now cheap and sleek, they are ubiquitous.
    Paid downloads are not a “dead end” as Forrester asserts. Rather, they are an early-stage business opportunity evolving from an existing business model -- namely home video. While key catalysts are still needed to fuel paid downloads’ growth, these will inevitably come. Digital strategists at studios who dismiss paid downloads’ potential for movies in particular at this early juncture do so at their peril.
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