Some new data from video ad network BrightRoll suggests that Web video advertising is suffering along with every other category BrightRoll places video ads on top media and professional broadcast TV sites rather than user-generated video. In other words, this is the inventory that all the advertisers want, but there supposedly isn’t enough of it. Yet 50 percent of this “broadcast quality” video inventory goes unsold.
Amd while more advertising dollars keep pouring into this segment of Web video (BrightRoll claims its revenues grew 172 percent annually in the fourth quarter of 2008, up 12 percent sequentially from the third quarter—although it gives no absolute numbers), the rates advertisers are willing to pay keep coming down.
In the fourth quarter, across BrightRoll’s network ad rates for pre-roll ads were down 25 percent compared to the year before. It could have been worse. In comparison, remnant display ad rates were down 50 percent in the quarter.
For all of 2008, pre-roll CPMs were down 14 percent, and they were down 12.5 percent sequentially for the quarter.
Those awful pre-roll ads look like they are here to stay. BrightRoll reports that 83 percent of a typical video-ad campaign was made up of pre-roll ads, versus only 63 percent in the fourth quarter of 2007. BrightRoll CEO Tod Sacerdoti says this is because pre-rolls outperform other types of video ads in all the relevant measures: “duration viewed, click through rate, cost per view, brand lift and change in purchase intent.” BrightRoll served 620 million video ads during the fourth quarter.