If on a CPM basis TV ads cost about the same as online video ads ($30 vs $15 CPM), wouldn’t it be better to use the one where you KNOW the user saw the ad (video ad plays) and there are further metrics (click-through) to measure impact.

1. Video Ads
Destroy
TV Ads IN
Effectiveness
Dr. Augustine Fou
http://www.linkedin.com/in/augustinefou
April 23, 2012.

2. Executive Summary
• The purpose of this analysis is to compare the
quantity of video ad impressions vs TV (network and
cable) ad impressions and then to compare the
usefulness and impact for advertisers.
• Brand advertisers should ask:
• Whether their TV ads were even seen; don’t just ask for reach
• How TV ads compare on CPM basis to other tactics
• If there is a feedback mechanism, like click-throughs, to calculate
effectiveness and impact (with TV ads there isn’t)
April 23, 2012 2

3. Calculating TV
Ad Impressions
April 16, 2012. 3

4. Ad Impressions Calculation
# of Viewers x Length of Show = Viewer Hours
Ad Impressions = Viewer Hours x 24 ads/hr
Assumptions:
- Use the maximum # of ads per hour (24)
- Every user views every ad (which of course is false)
April 23, 2012 4

5. Amount of Advertising
Network TV
• For every 30 minute
episode, there are about 9 mins of
ads (or 10 – 12 ads ) – used How
I Met Your Mother as proxy
• For every 60 minute
episode, there are about 19 mins
of ads (or 20 – 24 ads ) – used 24
as proxy
April 23, 2012 5

6. Ad Impressions (Top 25 Network Shows)
Source: http://tvbythenumbers.zap2it.com/2012/04/17/tv-ratings-broadcast-top-25-american-idol-ncis-top-week-30-viewing/129412/
April 23, 2012 6

7. Amount of Advertising
Cable TV
• For every 30 minute
episode, there are about 7 mins of
ads (or 8 – 9 ads ) – used
Spongebob Squarepants as proxy
• For every 60 minute
episode, there are about 18 mins
of ads (or 16 – 18 ads ) – used In
Plain Sight as proxy
April 23, 2012 7

8. Ad Impressions (Top 25 Cable Shows)
Source: http://tvbythenumbers.zap2it.com/2012/04/17/tv-ratings-broadcast-top-25-american-idol-ncis-top-week-30-viewing/129412/
April 23, 2012 8

9. Online Video
Ad Impressions
April 16, 2012. 9

10. Video Ad Details
Inputs: Derived Data:
Avg online content video: 6.4 mins 22 hrs of video per viewer/mo
Avg online video ad: 0.4 mins 19 mins of ads per viewer/mo
181 million U.S. Users watch videos
37 billion videos watched (March 2012)
8.4 billion video ads (March 2012)
Video ads on 18.5% of videos viewed
1.5% of viewing time spent on ads
Source: MarketingCharts, April 24, 2012
April 23, 2012 10

11. Comparison
April 16, 2012. 11

12. By The Numbers
Network/Cable TV Online Video
132 hrs of TV per viewer/mo* 22 hrs of video per viewer/mo
41.8 hrs of ads per viewer/mo 19 mins of ads per viewer/mo
32% time spent on ads 1.5% time spent on ads
24.5B ad impr by Top 25 Network Shows
5.1B ad impr by Top 25 Cable Shows
30B ad impressions per month 8.4B video ad views (March 2012)
DON’T‘ KNOW IF USER SAW IT Know user saw ad and have
further metrics of clicks
* Source:: http://www.emarketer.com/blog/index.php/time-spent-watching-tv-tops-internet/
April 23, 2012 12

13. What % of ads are viewed?
Network/Cable TV Online Video
30B TV ads aired /mo 8.4B video ads shown /mo (March 2012)
• Nielsen estimates 56% ads skipped by DVR Completion Rates (% ads viewed to completion)
• IPG/YuMe estimates 63% ads avoided • 78%: 0 – 15 second ads
• 60% ads skipped was used to calculate • 74%: 16 – 30s ads viewed to completion
• 61%: 31 – 60 second ads
• 40% TV ads not skipped (possibly viewed) • 54%: >60 seconds
12B TV ads viewed /mo 6.2B video ads viewed /mo
• Source:: Nielsen (2010) estimates that around 56% of ads are never seen (because they are skipped using DVR)
• http://blog.nielsen.com/nielsenwire/media_entertainment/do-americans-watch-more-dvrd-commercials-than-you-think/
• IPG/YuMe (2011) shows that 63% of TV ads are ignored (because users turn away or are doing something else when commercials come on).
• http://adage.com/article/adagestat/smartphones-a-bigger-distraction-dvrs/227725/
April 23, 2012 13

14. Online Video Spanks TV Ads
General Recall:
Video Ads 41% better than
TV Ads
Brand Recall:
Video Ads 79% better than
TV Ads
Message Recall:
Video Ads 86% better than
TV Ads
Likeability:
Video Ads 86% better than
TV Ads
April 23, 2012 14

15. Video 2x better, especially among
younger viewers
13-24 yr olds:
Video Ads 2x better than
TV Ads
25-34 yr olds:
Video Ads 2x better than
TV Ads
35-49 yr olds:
Video Ads 1.8x better than
TV Ads
50+ yr olds:
Video Ads 1.3x better than
TV Ads
April 23, 2012 15

16. MAJORITY of Users Skip TV Ads
65%
65%
54%
April 19, 2012. 16

17. Large % of ads are never seen
Findings: comScore, March 26, 2012
• nearly a third (31%) of online display ads
are never seen,
• 72% of campaigns had at least some ads “If potentially up to 65%
running next to objectionable content. of TV ads are not even
Findings: AdSafe, Q4 2011 seen, shouldn‟t the
• Over 38% of online display ads are proponents be more
never seen
• Of the ones that are seen, 75% are
transparent and report
viewed for less than 0.5 seconds „viewed ads‟ instead of
continuing to obfuscate
data to hide the truth?”
Google, comScore, AdSafe
proposing new ways to measure
“viewed ad” for online display
April 19, 2012. 17

18. The new reality isn’t
pretty for TV advertising
Advertisers should know that …
• Of the 30 billion theoretical monthly ad impressions across
the Top 25 network and cable TV shows …
• If we take into account the 50 – 65% skipping via
DVRs, the theoretical impressions drop to 12 billion /month
…
• If brand advertisers are not sure if their ads are even
seen, then even the “branding” argument breaks down.
April 23, 2012 18

19. Comparative Costs
Cost per Thousand (CPM) : Cost to reach 1,000 users or impressions
$500
$450
$450
$400
$350
$300
$250
$250
$200
$150 $140
$100
$50 $30 $15 $7 $2
$0
Direct Mail Mail Order Drive Time Prime Time Online Online Online
Catalog Radio TV Video Ads Display Search
Source: Why Digital Kicks Traditional Tactics in Cost Effectiveness, March 16, 2012
March 16, 2012. 19

20. Smart advertisers have
already shifted dollars
April 23, 2012 20

21. So What?
If on a CPM basis TV ads cost about the same as
online video ads ($30 vs $15 CPM), wouldn‟t it be
better to use the one where you KNOW the user saw
the ad (video ad plays) and there are further
metrics (click-through) to measure impact.
- Dr. Augustine Fou
April 23, 2012 21

22. Dr. Augustine Fou – Chief Digital Strategist
Dr. Augustine Fou is an industry-recognized thought
leader in digital strategy, search and social media
marketing and former Group Chief Digital Officer of
Omnicom's Healthcare Consultancy Group. Dr. Fou has
over 16 years of management consulting and digital
strategy consulting experience, advising CMOs,
marketing executives, and global brands. He pioneered
the application of the Unified Marketing™ framework
to optimize marketing and advertising across traditional
and digital channels.
FORMER CHIEF DIGITAL OFFICER, HCG (OMNICOM)
MCKINSEY CONSULTANT
CLIENT SIDE / AGENCY SIDE EXPERIENCE
PROFESSOR AND COLUMNIST
ENTREPRENEUR / SMALL BUSINESS OWNER
PHD MATERIALS SCIENCE (MIT '95) AT AGE 23
ClickZ Articles: http://www.slideshare.net/augustinefou
LinkedIn: http://www.linkedin.com/in/augustinefou
April 23, 2012 22
acfou@mktsci.com

23. Acknowledgements
Christian Busch
General Manager, Alloy Digital @christianbusch
Jonathan Mendez
CEO, Yieldbot @JonathanMendez
Mark Risis
VP, Interactive Advertising, Tivo mrisis@tivo.com
Ash Karbasfrooshan
CEO, WatchMojo @ashkan
Tim Fogarty
Sr. Digital Strategist, M80 @n0her0es
April 23, 2012 23

24. APPENDIX
April 16, 2012. 24

25. Free Video Ad Impressions
25 million
impressions
in 10 days
http://www.youtube.com/watch?v=316AzLYfAzw
If the ad is content, now online video makes it possible to
reach as large if not larger audiences than network TV shows
AND you know users actually played the video.

26. Top 10 Brands on Network TV
• Only 5 of 10 top brands are
advertisers; the rest are “house
ads” promoting own network
• There are 10,080 minutes in a
week; this chart says every single
advertiser had ads played on
average 1 – 2 times a minute.
• It we take 10 – 12 ads per half
hour, we get 3,500 ads per
week, assuming every hour of a
24 hr day is primetime.
April 23, 2012 26

27. Top 10 Brands on Cable TV
• Only 5 of 10 top brands are
advertisers; the rest are
“house ads” promoting own
network
April 23, 2012 27

28. Video Ad CPMs
Video Ad Pre-roll CPMs:
$10 - $11
Video Ad Pre-roll CPMs:
$8 - $10 (Women’s Lifestyle)
Source: TubeMogul, Nov 17, 2011
April 23, 2012 28

29. Video Ad Viewers are
Impatient
Completion Rates (ads viewed to completion)
78%: 0 – 15 second ads
74%: 16 – 30 second ads
61%: 31 – 60 second ads
54%: >60 seconds
Source: Vindico via MarketingCharts, April 13, 2012
April 23, 2012 29

30. Time Spent
Online TV
April 23, 2012 30

31. Time Spent Across Media
April 23, 2012 31

32. Time Spent vs Ad Spend
April 23, 2012 32

33. YouTube hits 3B views per
day
Source;
YouTube
Press Release
May 25, 2011
April 23, 2012 33

34. Network Top 25 w/e April 15, 2012
R=Repeat
# Viewers
S=Special HH Rating HH Share
Rank Shows Net (Live+SD)
P=Premier (Live+SD) (Live+SD)
(000)
e
1 NCIS CBS 17660 11.0 18
2 American Idol-WEDNESDAY FOX 16807 10.0 16
3 Dancing with the Stars ABC 16387 10.6 16
4 American Idol-THURSDAY FOX 15810 9.7 16
5 DANCING W/STARS RESULTS ABC 13386 8.9 13
6 NCIS: LOS ANGELES CBS 12864 8.3 13
7 Criminal Minds CBS 11809 7.5 11
8 60 Minutes CBS 11025 7.2 13
9 VOICE NBC 10518 6.2 9
10 Two and a Half Men CBS 10400 6.5 10 Source:
11 Modern Family ABC 10351 6.3 10
12 Hawaii Five-0 CBS 10304 6.6 11 TVByTheNumbers
13 Big Bang Theory,THE 9P-SP(S) SR CBS 10208 6.2 10 April 17, 2012
14 Good Wife, THE CBS 10161 6.6 10
15 Body Of Proof ABC 10045 6.7 11
16 CSI CBS 9944 6.3 10
17 SURVIVOR: ONE WORLD CBS 9906 6.0 10
18 Big Bang Theory, THE R CBS 9720 5.9 10
19 MIKE & Molly CBS 9578 5.9 9
20 Unforgettable CBS 9448 6.2 10
21 Amazing Race 20 CBS 9123 5.5 9
22 VOICE:RESULTS SHOW NBC 8999 5.5 8
23 NYC 22 P CBS 8859 5.7 9
24 GREY'S ANATOMY ABC 8847 6.1 10
25 Person Of Interest 10P-SP(S) SR CBS 8580 5.5 9
April 23, 2012 34

35. Cable Top 25 w/e April 15, 2012
Viewers Live+SD
Rank Shows Net Day Time HH Rating
(000)
1 Pawn Stars HIST MONDAY10:30 PM 5381 3.4
2 Pawn Stars HIST MONDAY10:00 PM 5210 3.3
THURSD
3 Swamp People HIST 9:00 PM 4958 2.8
AY
SATURD
4 LEGEND OF KORRA NICK 11:00 AM 4548 2.7
AY
SATURD
5 SpongeBob NICK 10:30 AM 4391 2.6
AY
6 WWE Entertainment (WWE Raw) USA MONDAY10:00 PM 4342 2.7
7 WWE Entertainment (WWE Raw) USA MONDAY9:00 PM 4230 2.7
SATURD
8 SpongeBob NICK 10:00 AM 3966 2.5
AY
9 American Pickers (BOYS TOYS) HIST MONDAY9:00 PM 3939 2.5
10 SpongeBob NICK
SATURD
AY
9:30 AM 3824 2.3 Source;
GAME OF THRONES (13:WHAT IS DEAD
11
12
MAY NEVER DIE)
NBA Basketball(MIAMI/CHICAGO)
HBOM
TNT
SUNDAY 9:03 PM
THURSD
8:16 PM
3766
3671
2.2
2.4
TVByTheNumbers
AY
13 Shake It Up (WHODUNIT UP) DSNY SUNDAY
WEDNES
8:30 PM 3669 2.2 April 17, 2012
14 NCIS USA 8:00 PM 3603 2.4
DAY
15 SpongeBob NICK SUNDAY 10:30 AM 3589 2.3
16 IN PLAIN SIGHT USA FRIDAY 10:00 PM 3588 2.5
17 SpongeBob NICK SUNDAY 10:00 AM 3502 2.2
WEDNES
18 NCIS USA 9:00 PM 3496 2.4
DAY
19 A.N.T. FARM DSNY FRIDAY 8:30 PM 3438 2.1
SATURD
20 SpongeBob NICK 9:00 AM 3399 2.1
AY
AUSTIN & ALLY (BURGLARIES &
21 DSNY SUNDAY 8:00 PM 3281 1.9
BOOBYTRAPS)
SATURD
22 VICTORIOUS NICK 8:00 PM 3237 1.9
AY
THURSD
23 THE OREILLY FACTOR FOXNC 8:00 PM 3174 2.1
AY
WEDNES
24 Family Guy ADSM 11:30 PM 3154 2.0
DAY
REAL HOUSEWIVES ATLANTA(S) (421
25 BRVO SUNDAY 9:00 PM 3138 2.1
REUNION PART 1)
April 23, 2012 35

36. Gross Rating Point
Gross rating point (GRP) is a term used in advertising to
measure the size of an audience reached by a
specific media vehicle or schedule.
It is the product of the percentage of the target
audience reached by an advertisement, times the frequency they
see it in a given campaign (frequency × % reached).[1]
For example, a television advertisement that is aired 5 times
reaching 50% of the target audience would have a GRP of 250
(5 × 50%).
April 23, 2012 36