In Depth

Column: Online Video to the Rescue!

It’s an upturned entertainment business! It’s a shrinking advertising upfront! Who will save us?
Online video—that is, if you believe comScore Chairman Gian Fulgoni.

OK, maybe he didn’t exactly claim that online video would swoop in and save the day, economywise. Still, the head of one of the most respected and important online measurement services is bullish on the role Web video will play in the advertising business in 2009.

At the OMMA Hollywood conference in Los Angeles last week (which defied conventional wisdom about the events business with its big crowds and standing-room-only sessions) Mr. Fulgoni spoke about the role Web video can play in moving the online advertising business away from antiquated measurements and toward meaningful ones that drive media buys by marketers.

Case in point: Brands using online video ads have seen as much as a 40% increase in consumers visiting the marketer’s Web site or buying their products compared with other ad forms, he said.

“Online video has come of age,” Mr. Fulgoni said. “We have somewhere just under 80% of the online population who will watch online video in a month, and the number of videos watched is up massively—60% versus a year ago.”

Those numbers are encouraging for advertisers because they represent a vast potential to reach an engaged audience. Even better news is that the length of time consumers spend watching video is on the upswing. Web viewers watched about six hours on average per month in January, up 15% from the month before. Also, the average viewer tuned in for 3.5 minutes per video in January, up from 3.2 minutes per video in December.

That’s a small increase, maybe even a rounding error, but it’s worth watching. Here’s why: As viewers become comfortable watching for longer periods of time, marketers can slip in more ads.

“If we stick with 3-minute clips, that limits the number of ads,” Mr. Fulgoni said. “You want these longer-running shows to maximize advertising dollars.”

Super Bowl Commercials on Hulu

Length of viewing is going to be one of the key components for the future of online advertising, Mr. Fulgoni said.

Hulu is certainly doing its share to drive up the time spent watching Internet TV because it carries primarily TV shows and movies. In February, Hulu viewers watched 332 million videos, a 33% increase from the month before.

That’s due in part to Super Bowl commercials highlighted on the site in early February. But it’s also an encouraging sign that TV viewers of all stripes and shapes are becoming comfortable watching longer content on the Web.

“We might be at the bottom for these troubled times,” Mr. Fulgoni said.

That sure sounds nice.