BrightRoll: Q2 Pre-Roll Video Ad Rates Are Down, But Total Revenues Are Up

Video ads are the great hope of brand marketers on the Web. They are easy to understand (it’s just like on TV, kinda) and easy to create. That’s why pre-roll video ads will never die. Brand marketers love ’em.

As the rates for pre-roll video ads on the Web go down, it looks like total video ad revenues keep going up. At least that is what is happening across BrightRoll’s video ad network. BrightRoll is one of the largest video ad networks, according to comScore VideoMetrix, with a reach of 51 million unique viewers in May, 2009, which is more than Yahoo’s video sites or Hulu. (But it doesn’t serve as many video streams as either one).

BrightRoll reports that in the second quarter:

  • Avg. Pre-roll CPM: Q209 vs. Q109 – up 3.1%
  • Avg. Pre-roll CPM: Q209 vs. Q208 – down 10.4%

So the CPM rate (cost per thousand views) for video pre-rolls is flat with last quarter at roughly $20. But it is down from last year by 10 percent, and they need to go down further to push video Web ads beyond novelty status. Even with CPMs keeping steady, BrightRoll saw network ad revenues double from last quarter:

  • Revenue: Q209 vs. Q109 – up 217%

That is quite a jump. And brand advertisers are increasing their the amount of their Web video ad budgets they are spending on pre-roll ads as opposed to other types of clickable units which appeal more to performance-oriented marketers. As more and more professional content makes its way onto the Web, the more “safe” inventory there will be for those brand advertisers. Even YouTube is close to making money. CPMs still need to be cut in half, though.