Online Video: The Time is Now!

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Online Video: The Time to Invest is Now
By Randy Bennett, NAA

In February 2008, Internet users viewed 10 billion videos, a 66 percent increase over February 2007, according to comScore, a leading Web measurement firm. Almost a third of those views came from YouTube alone.

Meanwhile, local online video advertising was a $400 million business in 2007, according to Borrell Associates. eMarketer expects that online video ads will pull in $1.3 billion nationally this year.

While still a small percentage of total and local online advertising, online video represents an enormous opportunity for newspapers to grow revenue and audience. Borrell estimates that online video advertising will grow from less than 5 percent of local online revenue in 2007 to 28 percent in 2012.

“Zooming In on Online Video: A Development & Growth Guide for Newspaper Web Sites” is intended to help newspapers of any size develop profitable video applications. The cost of entry to create quality video continues to decline while the success of online video continues to grow. As competition heats up for online video mindshare, newspapers have an excellent opportunity to leverage their skills and content and capture an even larger share of online advertising spending.

The Newspaper Advantage

Newspapers have done well at monetizing online video, capturing a 26 percent share of online local advertising last year. But local TV stations are beginning to wake up. CBS in March announced that it will be syndicating local TV station content via widgets to local Web sites and bloggers, splitting ad revenue with the local site.

That’s a smart move by CBS. Online video is a very viral activity, creating additional opportunities to build awareness of, and drive traffic to, newspaper sites. A 2007 Pew Internet & American Life Project study found that 57 percent of online video users (67 percent of 18-29 year olds) send video links to others and 75 percent receive video links.

The good news for newspapers is that “news” is the most popular video category, according to Pew. Sports, Political and Educational also garner great interest among online video viewers.

As newspapers grapple with building loyalty to their Web sites, online video also appears to have a dramatic impact on time spent on the site. According to, average time spent per visit to YouTube was about 17 minutes, compared to less than 8 minutes for and just about 6 minutes for

A 2007 report by information technology research firm Gartner, titled “Newspapers Can Find Salvation as TV Channels,” cited a variety of reasons why the online video opportunity is right for newspapers, including:

  * Newspaper reporters’/columnists’ comfort in front of the camera, based on experience with earlier local and national TV partnerships.
  * Newspaper editorial skills at coming up with interesting story ideas and clever prose.
  * Barriers to creating high-quality video content are low.
  * Growth in the field of video service providers, whose functions include content creation, distribution, management and reporting.

Gartner’s recommendation:

  * Develop a video plan by identifying your unique market characteristics and “brand identifiers.”
  * Quickly develop video production and content management skills among the editorial and IT staff.
  * Seize the opportunity for online ad revenue with local advertisers.

Monetizing Online Video

As noted above, the size of the online video ad pie is likely to expand dramatically over the next several years, particularly as media companies experiment with a variety of video ad formats that are both engaging and acceptable to consumers.

Video represents a new opportunity for newspapers to compete with other “branding” media and extend its portfolio of ad vehicles that impact consumers at every step of the purchase funnel. In 2007, newspapers captured 26 percent of local online video advertising, according to Borrell, much of it from video related to classified verticals.

While the prospect for newspapers to use online video to steal share from TV, at this stage online ad dollars appear to be coming from marketers’ Web, not TV, budget. According to a 2006 Jupiter Research survey, 60 percent of advertisers and 79 percent of agencies were buying online video ads from their online budget.

While producing video has become much cheaper, newspapers will still need to focus on quality, ease of buying and targeting issues. A recent survey by online ad network Tribal Fusion indicates that, for marketers that have purchased online video ads, smooth delivery, detailed reporting, pricing, video quality and targeting are the most important issues for making purchasing decisions. For those who have not yet purchased online video ads, delivery and targeting (content or audience) are the key issues.

As with display advertising online, a number of video ad networks are emerging, although standards across video sites continue to be an issue. Networks include companies such as BrightRoll, BrightCove, VideoEgg and ValueClick.

This report will help newspapers understand online video advertising opportunities, in addition to offering guidance on starting or growing your newspaper’s online video operations – from purchasing equipment to best practices. “Zooming In on Online Video” ( also includes the results from NAA survey of newspapers.

Many newspapers already have a great video platform to build on and have attracted more than a quarter of the online video advertising dollars in their markets. For those who are just starting out, or thinking about launching video content, now is the time to extend your expertise, build your video brand and solidify your value proposition. Newspapers have a great opportunity to tap new audiences and attract new dollars by zooming in on the potential of online video.

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