AOL, Hulu, Yahoo, and Google’s YouTube are among the companies that provided so-called “newfront” presentations to advertisers this year — sales pitches urging them to divert to Web video platforms some of the billions that they plan to spend on conventional TV. Some major advertisers including GM and Samsung Mobile have said that they expect to do just that this year. But while that’s made this upfront season interesting, “we think it is still too early for online video to be meaningfully disruptive to TV,” Barclays Equity Research analyst Anthony DiClemente says in a report this morning. He notes that most viewers still flock to TV much more than the Web: The average person spent 153:19 hours a month watching the tube in Q4 — with another 11:44 hours going to time-shifted TV — according to Nielsen data. But they devoted just 4:34 hours watching Web video, and 4:20 watching videos on mobile phones. Things are changing slowly. Monthly television watching was down 46 minutes from the average at the end of 2010, more than made up by the 1:17 hours added to timeshifted TV. But Web videos were only up 11 minutes, and there was no change in video viewing on mobile phones. What accounts for this year’s expected $2.5B in digital video advertising, a 36% increase over 2011? That’s come “more at the expense of print ad budgets,” DiClemente says. He notes that more viewers will turn to Web videos as entertainment stars use the platform for their passion projects. But he still is unimpressed with the business model: It costs a lot to produce high quality entertainment, and “we wonder about what the eventual return on that investment could be.”
Advertisers Aren't Ready Yet To Move Lots Of TV Spots To Online Video: Analyst
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