Online Video Consumption Doubled in Q2

-Soaring Consumption Is Driving Monetization

Online video consumption on connected devices such as smartphones, tablets and gaming consoles doubled in Q2 2012, according to video technology firm FreeWheel, which develops monetization rights management systems.

Online video hit a record during the quarter, with 1 billion video views, representing 8% of the total video view volume.

“This number is only expected to grow as more rights are cleared for mobile and alternate viewing devices, and major events like the 2012 Summer Olympics are promoted as ‘watch anywhere’ content,” the report said.

Video Advertising Market Expanding Rapidly According to the report, the advertising market for online video is expanding at a faster rate than content. Video view volume increased 10% year over year according to the report, while video advertising volume increased 68% year over year.

Completion rates on ads have increased as well, according to the report. The completion rate of ads in long form content, defined as videos 20 minutes or longer, has reached 91%, and mid-form content (5-20 minutes) ad completion rates have hit 80%. Short-form content (less than five minutes) ad completion rates are at 69%, according to the report.

“Consumers very clearly understand the exchange of ads for professional, mid-form, and long-form content,” the report said, “as evidenced by consistently high completion rates.”

Pre-roll form ads, which run before the video, had the smallest growth rate, according to the report, while mid-roll and post-roll ads are growing at a much faster rate. Pre-roll ads have grown 49% year over year, while mid-roll ads have grown 159%, and post-rolls have grown 256% year over year, according to the report.

“While the pre-roll format continues to dominate in sheer volume, advertisers are learning that mid-rolls and post-rolls also play a critical role in optimally monetizing content,” the report said.

Pre-roll ads are by far the most popular, long considered the go-to ad form for digital video. The report said that mid-roll ads are growing as longer-form content is becoming available online. Growth in post-roll ads can be attributed to publishers creating “playlists” of short-to-mid length videos, and inserting ads behind videos as the next one queues up – “in which case a ‘post-roll’ effectively acts like a mid- roll,” the report said.

The report said online video advertising could one day rival that of TV, but not until the content available online is properly tailored to effectively support ad delivery.

“There are dollars available to support the production of this content and indeed, they need to continue to increase their supply,” the report said. “This can be achieved in several ways: make more mid-form and long-form content available online, syndicate that content as broadly as possible, and take advantage of proven distribution sources available via mobile and alternate devices.”

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