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May 24, 2007
Nearly 60% of Consumers Surveyed
Watch Online Video, According to The Kelsey Group
Increased consumer
response to online video is driving the development of cost-effective
options for local and small-business advertisers.
Princeton, NJ (May 24, 2007) --
In the latest wave of The Kelsey Group’s User View study,
59 percent of those surveyed claimed to watch online video, and
more than half said they engage in some sort of response activity,
such as visiting a Web site, going to a physical location or making
a purchase. The study’s findings are highlighted in a new
report by The Kelsey Group titled, “Online Video: A New Local
Advertising Paradigm,” which credits the popularity of YouTube
with bringing online video watching to mainstream audiences.
“YouTube has largely popularized the concept
of watching short videos on a computer screen and has likewise familiarized
consumers with the idea of watching short video ads,” said
the report’s author, Michael Boland, Kelsey Group senior analyst.
“A wide range of business models are coming to market in the
hopes of tapping into the growing demand for video. We are in a
‘wild west’ phase of experimentation on all fronts—content
generation, licensing, search and monetization.”
According to the report, production companies such
as Spot Runner and TurnHere offer to produce and distribute video
ads for small businesses at price points that are significantly
lower than those of traditional advertising, bringing video advertising
within the grasp of many small businesses for the first time. The
report reasons that the value of video may be easier to comprehend
for many small businesses compared with some forms of online performance-based
marketing. Pay-per-click, for example, may be abstract and less
attractive to certain small businesses that are more interested
in leads, foot traffic or phone calls. As a result, video has the
potential to be an easier integration to a cross-platform product
bundle. The vanity factor that has driven significant revenues for
Yellow Pages publishers is also clearly present in video.
Additional conclusions offered in The Kelsey Group’s
online video report include:
- Small-business video advertising can combine the traditional
strengths of pull-based directional marketing, the Internet’s
targeting capabilities, and the emotional and dramatic power of
television. Given the demographics of broadband users, the online
audience reached by these ads would also be well-educated, affluent
and more likely to engage in pull-based content retrieval.
- The opportunity is greatest for Internet Yellow Pages publishers,
given sales assets, existing SME relationships and the growing
demand for video advertising in the small-business marketplace.
Add to this the presence of high-margin, low ad elasticity vertical
categories, such as professional services, and the potential becomes
clear.
About the User View Study
User View is The Kelsey Group’s proprietary user behavior
tracking study, which focuses on the evolution of consumer usage
of traditional and online information sources to find and locate
local businesses. Research for the current wave of the study (Wave
IV) was conducted through an online survey of 501 adult consumers.
The Kelsey Group White Paper “Online Video:
A New Local Advertising Paradigm” is available to TKG advisory
services clients. Contact Steve Vasil at (905) 468-8786 or svasil@kelseygroup.com
for more information on Kelsey Group advisory services.
About The Kelsey Group
The Kelsey Group is the leading provider of research, data and strategic
analysis on directories, small-business advertising and online local
media. Founded in 1986, the company has built a reputation as the
premier analyst firm covering the directory publishing community
and the emerging local search marketplace, providing advisory services
(The Kelsey Report® and Interactive Local Media), publishing
(Global Yellow Pages™ and Local Media Journal™), consulting
(more than 300 individual assignments) and conferences (67 events).
For more information contact:
Eileen Pacheco
(781) 556-1026
eileen@tango-group.com
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