Here’s what we’re seeing in financial media: The current enthusiasm for video is driven more by revenue than by a sense that video is great for users. Many of the financial media companies we talk to are sold out of their video ad inventory. They’re trying to figure out how to get users to watch more video.
Well, it’s not surprising that prices are high for video ads, and demand from advertisers exceeds supply. If you force someone to watch a pre-roll ad, you have 100% of their attention. You’ll get sky high CPMs for that. The problem is that pre-roll ads are a horrendous user experience. Pre-roll ads are like going back to TV before DVRs. And they’re a lot worse than ads on web pages, which don’t stop or delay users from reading an article.
It gets worse. Many users want to watch short videos, so the ratio of the pre-roll ad time to the effective content time (before the user abandons the video) is often extremely high.
I think this explains why there’s huge advertiser demand for video, and not enough users watching it.
That’s not to say that video can’t be great for users, if we fix the ad problem. Video can provide context and important information that you can’t really capture with words. (Did you see the videos of the tsunami?) And video can be a great browsing experience.
But video isn’t great for everything… Imagine trying to do this with video.