How online video ads can pass TV ad revenues

TV experience and Internet powercomes together

Oded Napchi, HIRO Media

THE MEDIUM

IS NOTNECESSARILY THE MESSAGE…

… THE ‘REAR VIEW MIRROR EFFECT’ CAN BE BENEFICIAL…

TV ADVERTISING VERSES INTERNET

Although Internet is becoming the leading advertising medium,

Publisher see MORE REVENUE FROM TV ADS

* in the US

Internet Revenue return is around

$0.35*

Television

RPH (revenue per hour per user)

$0.50*

UK TOTAL AD SPEND: SEPT 2009

PwC 0909

24%

22%19%

12%

11%5%

2%3%

1%

internet tv press directmail classifiedoutdoor directories radio cinema

WHY DO WE GENERATE LESS REVENUE

FROM ONLINE ADS?

% of people who believe a particular advertising platform is most effective

tv

news paper

magzine

display

online video ads

0 10 20 30 40 50 60

TV IS STILL THE MOST EFFECTIVE ADVERTISING MEDIUM

Deloitte 08/10

tv

news paper

display

iphone

online video ads

0 10 20 30 40 50 60

% of people who find ads more memorable on a particular platform

TV ADS ARE MORE MEMORABLE THAN INTERNET ADS

Deloitte 08/10

THE PARADOX

they say…

the future of advertising lies on the Internet

THE PARADOX

they say…

the future of advertising lies on the Internet

however… at present the

Internet is less effectivethan TV ads

LESSONS TO LEARN

Half a century of TV advertising experience has

resulted in the most effective means of

persuasionWEB ADVERTISERS

SHOULD LEARN FROM THIS…

LET’S UNITE with the power

of internetThe knowledge

of TV advertising

The knowledge of TV

advertising

TV Vs ONLINEmain concept

TV = Demographic targeting

Online = CTR optimization

Most video advertising is brand advertising.Brand advertising DOES NOT encourage

clicks.

SO… CTR BECOMES IRRELEVANT

TV Vs ONLINEFrequency cap calculation

TV = optimizing to number of views

Online = limiting max number of views

For people to understand and remember a message

THEY SHOULD SEE IT SEVERAL TIMES

Hence limiting the number of impressions

DAMAGES THE POTENTIAL EFFECT OF THE AD

TV Vs ONLINEContent Targeting

TV advertisers target programmes

Online advertisers target web pages

ASSOCIATING AN AD WITH CONTENT IS MORE

EFFECTIVEJack Daniels would advertise within Mad MenMcDonald’s would not advertise within Super

Size MeThe web page, whether it is a home page or an Internal page, does not have the same effect

with the power of online media

Online powerAd load

TV ADS minutes PER HOUR OF CONTENT

20INTERNET ADS

minutes PER HOUR OF CONTENT

3

HIRO uses ad load optimization algorithm for achieving the best ad load

5 minutes of ADS PER HOUR, DOES NOT CREATE A DROP IN USAGE

Online powerAd load

TV shows appear inONE channel

The ads are sold by ONE organization

Online powerAd routing

Internet is VIRAL.Content is

SYNDICATED

Ads are sold to ALL SITES are by

ONE ORGANIZATION

Instead of having 1 ad sales

organization selling to 1 site

Online powerAd routing

1

Online powerAd routing

You can have

multiple ad sales organization,

selling for multiple web sites

1,000,000

Instead of having one ad sales organization selling to one site

Online powerAd routing

You can have multiple ad sales organization selling for multiple web sites

How does it WORK?

TV way of thinking | Test case

• TV company• Around 2M video impressions per month• Moved from leading display ad server to HIRO

TV PARADIGM FOCAL POINTS

• Uses demographic targeting• Uses advanced media planning rules• Uses video ad load optimization

The result?

AD REVENUES INCREASED

oct nov dec january feb march april may june july

revenues

x

2x

3x

4x

5x

AVERAGE CPM DOUBLED

Start of demo targeting

october

november

december

january

february

march

april

mayjune

july

x

2x

3x

TARGETED ADS LEAD THE WAY

feb march april may june0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

% imp % rev

THE AD LOAD EXTENDED

oct nov dec jan feb mar apr may jun jul august0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

140.00%

Mid Roll ratio

AND ADVERTISERS BUY MORE ADS

oct nov dec january feb march april may june july0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

% sold inventory

IP POWER TEST CASE

• Content syndicator• Around 60M video impressions per month• Moved from leading ad network server to HIRO

IP POWER FOCAL POINTS

• Uses ad routing• Uses video ad load optimization

The result?

AD VIEWED

MORE MID AND OVERLAY

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

pre/midpre/overlay

For more information: contact@hiro-media.com

ww.hiro-media.com

By harnessing the knowledge of TV advertisingand the power of digital media,

ONLINE VIDEO REVENUES CAN FINALLY PASS TV AD REVENUES