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Web Video Viewership Still Low Amid Heavy Ad Spend

18 Sep, 2013 By: Doug McPherson

NEW YORK – Nielsen reports Web video accounts for just 2.3 percent of total TV viewing, which includes traditional Web video, YouTube and TV streamed on the Web by companies like Hulu and Netflix.

Yet, eMarketer has reported that web video will take $4.1 billion in ad dollars this year, about 6 percent of the total ad dollars allocated to video on TV and the Web. What’s more, it expects a 39-percent increase in advertiser spend on digital video in 2014, compared to a 3.3 percent increase in traditional TV spending.

Brian Wieser, a senior research analyst with Pivotal Research Group, told AdAge last week that most people focus on a narrative that is “frankly wrong” when asked about the discrepancy between perception and reality regarding online video.

"The industry is in a bubble," Wieser said, noting that the average American watches multiple hours of television a day, something that those on Wall Street and Madison Avenue – where such TV watching behavior is likely not as prevalent – are less likely to talk about.

Alex Kantrowitz, a writer for AdAge, says while some experts might lead one to believe otherwise, video consumption is not hastily moving from TV to the Web just yet.

In its "Cross-Platform" report released last week, Nielsen says more than 282 million Americans watch an average of more than 146 hours of television each month, or just under five hours each day per person. But only 146 million watch video on desktops, and in total they spend a just six and a half hours there each month.

Kantrowitz writes the numbers don’t include tablet video consumption, which Wieser states "should add significantly to this amount." And, the figures are being put forth by Nielsen which, it should be noted, has an interest in seeing robust television performance given its reliance medium for business. Still, the numbers are likely troubling to those counting on an uptick in video consumption time shifting online.

Dave Morgan, an ad-tech entrepreneur who left the online advertising industry to pursue opportunities in television, told AdAge the sustained dominance of television is no surprise to him, and a reason he left for TV in the first place. "I didn't believe that viewing behavior was going to leak away from the TV set," he said.

Wieser concluded that Facebook and Google will need to focus on non-TV budgets to "generate the growth that many investors expect from their online video initiatives."

Wieser noted that trends over time are hard to measure given a processing error in Nielsen's 2012 data that makes year-to-year comparisons difficult. But, he told AdAge, since he started tracking the same data points in 2006, the needle has moved very little.

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