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Are Facebook , YouTube and video games the new television?

Research released by Ofcom, the UK media regulator showed UK online ad revenue surpassed ITV1 and Channel 4's combined ad sales last year, as internet consumption ate into TV audiences.

 

Google’s UK turnover of £800m was equivalent to 80% of ITV1, Channel 4 and Five’s total ad revenues. But while TV ad revenues fell 2.2% last year to £3.47bn, earnings from TV subscriptions, like Sky TV, exceeded £4bn.

 

These findings are consistent with other industry research and confirm UK consumers’ and advertisers' gradual shift away from traditional media. The amount of time consumers spent watching TV fell 4% between 2002 and last year, while radio listening dropped 2%.

 

The Ofcom report also highlighted the increasing use of digital video recorders, saying that of the 15% of all UK households who use them, 78% said they used the devices to skip commercial breaks.

 

Ofcom said eBay was still the most popular UK web destination, although Bebo, MySpace, Facebook and YouTube were all in the Top 10 sites by time spent. 

 

Facebook is developing a new advertising platform to deliver video, display and contextual ads based on behavourial targeting to its 40m members. The Wall Street Journal reports that the system is the social networking site’s “top priority” and will show display ads as banners in members’ pages, while brands will bid for keywords via a PPC system similar to Google Adwords.  Analysts suggest this will allow Facebook to raise its current average $10CPM rates to $15CPM .

 

In response Google is launching in-video ads on YouTube.  Google has been testing several ad types on YouTube over recent months, and has finally opted for animated overlays, rather than the pre-roll format that has been adopted much more widely by other video content providers.

 

The ads will appear in the bottom 20% of the screen 15 seconds after a viewer starts watching a clip, offering them the option to see a commercial while the video is paused. If the viewer doesn't click on the ad, it disappears within 10 seconds.

Google has previously expressed fears that pre-roll ads could damage the user experience to the 130m YouTube user community, and says results of the in-video trials have been promising. Google is also considering introducing an advertsing revenue share model for the video content - to drive new content creation.   

 

eMarketer recently predicted that $775m would be spent on video advertising this year, up 89% from last year, and the market will have grown to $4.3bn by 2011

This further fragmentation of traditional media to lifestyle niches is good news for B2B and STM publishers - advertisers need to find stable, affluent and influential audiences.   

Another area of media fragmentation is the growth of interactive video games -  advertisers should consider brand messages in video games, provided they do not spoil or interrupt the overall gaming experience.  According to new research  conducted by CNET Networks UK for the Internet Advertising Bureau (IAB), the majority of gamers see and accept advertising as realistic – a replication of the real world, representing a large untapped opportunity for many publishers and advertisers.

 

The survey of 3,575 UK-based gamers found 52% have seen an in-game advert in the past 12 months, a third (33%) said they would be ‘quite’ or ‘very likely’ to buy a product they had seen advertised while playing, and 40% of respondents said that adverts added realism to a game.

 

Overall, of those respondents who said they had seen adverts in a game, two-thirds (64%) reported that they felt positively towards the brand.

 

More than a quarter (27%) do not consider interacting with a brand while playing a game for example, drinking a can of Red Bull to increase the energy of a character – as advertising. Furthermore, 17% do not perceive brand names that are shown in games as advertising. 

 

Both results highlight an uncertainty among gamers about what is advertising and what is placed simply to add realism, the report said. Mind you, would Coca Cola want Coke billboards in "Grand Theft Auto"?  

 

73% do not have a negative opinion of in-game ads provided that the placements are realistic, contextual to the game and non-interruptive to game-play. 

 

The majority (86%) of respondents said they would welcome an increase in advertising if it meant a reduction in the purchase price of a game.

Only 14% of respondents said advertising spoils the gaming experience.

 

The study was conducted by GameSpot UK, CNET Networks UK’s market-leading site for UK gamers. The gamers in the study were 98% male, with 44% aged between 13 and 18, 32% aged 19 to 24, and 17% aged 25 to 34. The vast majority of respondents were multi-platform gamers using a PC in conjunction with one or more consoles.

 

Of time spent gaming, 52% spend 10 or more hours gaming each week.  More than one in four game for more than 15 hours per week, while a third (32%) play for five to 10 hours a week.  Gamers are increasing the time they spend with consoles at the expense of other forms of media including TV, radio, print and even other digital activity.

 

76% of respondents said they watch less TV as a result of gaming.  Gaming also displaces other activity – 37% listen to the radio less, 34% read less print media, and 28% go out less.

 

Two thirds of respondents now play online games at least two hours per week, 40% play online games for at least five hours per week and one in five (21%) play online games for at least 10 hours per week.. For many, gaming is their principle leisure activity and more than half (58%) are gaming more than they did a year ago.

 

The survey of 3,575 gamers took place on the GameSpot UK (www.GameSpot.co.uk) website over three weeks in June and July 2007. All respondents to the survey were based in the UK.

 

GameSpot UK attracts 2.8 million unique users, 60.1 million page impressions and is the first UK gaming site to audit its 2.7 million video streams (source: ABCE March 2007).  

 

However, advertisers and media buyers will need to assess the discretionary purchasing power of a transient audience of 2.8m UK males aged 16-26....sounds a good market for cider, pot noodle and pizza!       

Published Tuesday, August 28, 2007 12:31 PM by Andy Black

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About Andy Black

Member of Special Libraries Association (SLA) - Military Librarians Division - winners of SLA Professional Award 2007 1981-1984 Bristol (TV, film, drama) 1984-1986 BBC (freelance) 1986-1989 TTV 1990-1997 Perfect Information Ltd 1997-2001 Excalibur 2001-2002 SmartLogik 2002-2004 Business Objects 2005 to date Convera.

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