Online Ads Are Booming, if They’re Attached to a Video

Brian Stelter|The New York Times

News Web sites are starting to look a lot less like newspapers and a lot more like television. and are featuring video much more prominently on their home pages, often prompting visitors to press play before they begin to read. Even The Wall Street Journal has moved its video player front and center with a twice-a-day live newscast on

A major reason is commercial. At a time when other categories of advertising dollars are shrinking, video ads are booming. News sites are adding more video inventory to keep pace with the demands of advertisers, and benefiting from the higher cost-per-thousands, or C.P.M.’s, that ads on those videos command.


The attention to video mirrors changes in how consumers are experiencing news. Major events — be it the presidential election or the death of Michael Jackson — bring a surge in video stream viewings by new users, and each time some of them stick around.

“Every watershed event leaves video more popular than before,” said Charles W. Tillinghast, the president of, a joint venture between NBC Universal and Microsoft .

K. C. Estenson, the general manager of, a unit of Time Warner , said that “people are using the Internet in a different way now.” He added, “With broadband penetration becoming ubiquitous and more and more sites having this easy capability, people are expecting video to be there.”

Media companies typically do not break out figures for video advertising, and certainly the video revenue pales next to search and display advertising. But the growth has spurred investment and interest in video production.

Among Web sites operated by newspapers, The New York Times , Gannett and Tribune each reach more than a million viewers a month with video streams, comScore says. The home page of The Times sometimes streams live video of events; it carried a news conference Friday about the shootings Thursday at Fort Hood, Tex.

But video can be costly to produce, hindering some sites’ efforts to expand and leading people like Mr. Tillinghast to predict that access to television film (like a bounty of NBC News video) is an advantage.

Beyond news sites, video is now the fastest-growing segment of the Internet advertising market. Digital video amounted to $477 million in revenue in the first half of 2009, up 38 percent from the same time period in 2008, according to the Interactive Advertising Bureau.

With an estimated $5 billion in revenue in the first half of 2009, search remains the dominant segment of online advertising, but it is expected to grow only marginally this year.

Augmenting the increase in video spending is the growing acceptance of pre-roll — the once-derided ads that appear before a video plays.

“It actually works really well,” said Brian Quinn, the vice president and general manager of digital ad sales for The Journal’s digital network. A 15-second pre-roll “followed by two to five minutes of high-quality content is a fair-value exchange,” Mr. Quinn said.

Analysts say they expect the flow of online advertising dollars to video to continue. The research firm eMarketer projects 35 to 45 percent growth for the segment for each of the next five years, topping out at $5.2 billion in 2014. (Even then, it would hardly rival search advertising, which is projected to be a $16 billion business.)

What wasn't possible before

In the five-year outlook it released last month, eMarketer said that video ads would be the “main channel” for major advertisers seeking to increase their online spending. Already, ads for companies like Johnson & Johnson and Unilever pop up often on sites like

“More and more advertisers are starting to play in the online video space,” said Jeremy Steinberg, the vice president of digital sales and business development for the Fox News Channel.

News sites account for only a small portion of the 25 billion video streams counted by comScore on an average month. The firm reported almost 500 million video streams in its news and information category in September — still a substantial figure. Most of the streams occurred on (162 million, according to comScore) and (148 million).

Advertising dollars have not always kept pace with the growing view counts, but Mr. Quinn said video was currently the strongest ad format for

“I wish we had more, since we’re sold out,” Mr. Quinn said.

In September the site introduced “The News Hub,” a live Webcast from The Journal’s newsroom at 8:30 a.m. and 4 p.m. each weekday. When “Hub” is shown live on the home page, it includes a sponsorship mention and a companion display ad. When it is replayed, it includes a pre-roll ad. Sponsorships are sold monthly, with Charles Schwab being the current one.

The rate card for lists pre-rolls for a $75 C.P.M. before advertiser discounts. Mr. Quinn said the C.P.M. was around $50 last fall., which like is a unit of the News Corporation , now sells sponsorships of its daytime Web show, “Strategy Room.”

When the show had its debut in its current form earlier this year, it included only an occasional remnant pre-roll ad. This month, as viewership increased, the show started to include TV-style commercial breaks and advertiser logos in the corner of the video screen. Fox says the 9 a.m.-to-5 p.m. show gets an average of 35,000 streams per weekday.

Web executives say some clients think of online video as an extension of TV, and others think of it as an enhancement — one that allows for interactive messages and instant feedback from viewers. They acknowledge that the medium is still in many ways immature. Sites continue to disagree about the legitimacy of “autoplay,” a setting that starts videos automatically when a Web page loads, increasing the number of streams without necessarily knowing that the Web user is watching.

Web executives say that ads next to dispatches from Afghanistan normally cannot draw the same C.P.M.’s as lighter fare. has found success with lifestyle segments that are sold as a package between TV and the Web. Last month it introduced TodayMoms, a section for mothers sponsored by Wal-Mart with a TV connection on the “Today” show.

“The Web is fulfilling this promise of being a medium where you can enjoy video as much as you can see it on TV,” Mr. Tillinghast said. “The difference online is, if you want to do something with it — share it, stick it on a blog, post it on a Facebook page, or mark it and save it — you can do all that. And that was never possible before.”