Can Online Video Ads Rescue Newspapers?

This report is music to our years, the good news we've all been waiting for.

According to the New York Times, Online Ads Are Booming, if They’re Attached to a Video

Excerpts:

News Web sites are starting to look a lot less like newspapers and a lot more like television.

CNN.com and ESPN.com 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 WSJ.com... Video is currently the strongest ad format for WSJ.com....

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.

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

Some facts and figures:

* 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.

* 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.

* Analysts predict video ads will be the “main channel” for major advertisers seeking to increase their online spending.

* 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.

* Researchers project 35 to 45 percent growth for news video advertising for each of the next five years, topping out at $5.2 billion in 2014.

As one exec notes: “The Web is fulfilling this promise of being a medium where you can enjoy video as much as you can see it on TV. 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.”

Clear message for journalism Websites. You want more ad revenue? Produce and publish more video!