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Moving Ad Dollars From TV to Digital Not a Solution to a Growing Problem

Simulmedia CEO Dave Morgan points out issues for advertisers planning to shift budget over to digital video 3/18/2013 04:10:27 PM Eastern

The growing use of mobile devices to view video has been a
sticking point with advertisers, but planning to stay in the game by shifting
dollars over to digital video will not work, according to Dave Morgan, CEO and founder
of Simulmedia, in
an article on Ad Age.

The hype gives marketers hope that their plans to shift 10%
to 20% of their budget out of TV and into digital will prove beneficial, but
all research says that 97% of all video viewing in the U.S. still occurs on TV, the report said.

When it comes to Web video, scale, content quality, ad load,
usage concentration and price are all major challenges to advertisers, the article said. Only 2%
to 3% of all video viewed in the U.S. occurs on the Web, and over one-half is
on Google's YouTube, but over 80% of that content is not the type advertisers
look for, according to the report. The ad loads are also only 10% to 20% of conventional TV, which makes
it more difficult to measure its media weight, the story said.  A small portions of the Web video audience also
comprises most of cumulative Web video watching - 20% of all Americans watch
80% or more of all Web video viewed -with 20% of those viewers being heavy TV watchers, the story said.

According to the article, The price of ads on Web video is high relative to
television, especially on "quality" content, so media companies like NBCUniversal
can sell its Web video separately at higher prices.

Aside from traditional Web viewing over PCs, smartphone and
tablet viewing also poses the same challenges. Smartphones and tablets,
however, also virtually no means of audience measurement, and also has
extremely high pricing relative to TV, the report stated.

Audiences are also
moving over to so-called "dark networks," where networks and network day-parts
do not have Nielsen ratings, the article noted. Viewing research, when combined with Nielsen data,
shows that this inventory represents more than 15% of today's U.S. television
viewing, and possibly more than 20% in some regions, the story said. Because it isn't measured
by Nielsen, advertisers couldn't buy it-but companies like Rentrak, Kantar and
TiVo now offer services to deliver impression level and GRP equivalent
measurements, according to the story.

Although shifting the 10% to 20% of the video budget over to
digital seems like a good idea given the hype, but the challenges that
multiplatform video delivery poses make it more of a problem than a solution, the report said.

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