In what is becoming a familiar pattern, TV producers are finding an active second life for shows after they air. Much like DVDs are important for movie revenues, DVD sets of TV shows are selling well, as are iTunes downloads of individual shows at $1.99 a pop.
Now rebroadcasts are proving effective for TV show sponsors who support hosting on the TV shows' sites. This is likely to grow the online video advertising market beyond its current respectable-but-still-nascent status.
Consumers who access content via TV networks' sites are more likely to consider the brands that sponsor that content. They also have high levels of engagement with streaming or downloaded video
on network sites and are more likely to view those same shows on regular TV, according to a new study by Knowledge Networks.
Nearly half (49%) of TV network Website viewers say that sponsorship of a streaming or downloaded episode would increase their consideration of the sponsoring brand.
Users of streaming or downloaded network video also are significantly more likely than Internet users overall (30% vs. 22%) to buy from companies that advertise on their favorite programs.
Using the Internet to catch up on missed episodes helps retain viewers, too. A quarter of viewers of streaming or downloaded network TV video say they watch regular TV shows more often because of what they have seen on Internet video.
"For the most part, features on network and program Websites are building equity with program viewers, for both the TV networks and their advertisers," noted David Tice of Knowledge Networks. "There is much room to grow this crossover TV-Web audience."
This is all good news for online video advertising, which has been an also-ran to other online advertising categories — notably paid search — so far.
When it comes to dollars, paid search rules. When it comes to growth rates, online video advertising will lead the way over the next several years.
In 2007, US advertisers will spend nearly $8.3 billion on paid search ads, in contrast to only $775 million for online video placements — a nearly 11-to-1 ratio.
David Hallerman, an eMarketer senior analyst who covers both online video and paid search, estimates that by 2011 video ad spending will likely surpass $4 billion.
"Not only will this close the spending ratio (about 4 to 1, search to video)," said Mr. Hallerman, but measuring spending on the two formats will become far more problematic, since one will overlap the other, with searches calling up video ads.