According to a news article/commentary yesterday from Advertising Age's Madison and Vine Web site, video consumption online has grown 18 percent over the past seven months, with the average consumer now watching slightly less than 100 minutes of video a month.

The Madison and Vine piece looks at the trend of advertising to follow this trail, with major reallocations of traditional television ad funds now going to new or integrated media. While it isn't surprising that this growth in consumption leads to an influx of advertising revenue supporting online sites with video content, the article highlighted or alluded to a few important implications that greatly affect recent discussions we've had here on this blog:

1.) Transmedia content--With digital streaming poised to become increasingly profitable, those companies who integrate online video content as part of their entertainment package are at a particular advantage. If companies have bonus content available for download or streaming online, they can easily package ad sales that include advertising or sponsorship of both the traditional content and digital content that may become increasingly attractive to advertisers, who would benefit from having a strong association with dedicated fans who follow the product across multiple platforms;

2.) Product placement--As the Madison and Vine article points out, those companies who are paying for product placement now have added incentives, since more and more television shows are becoming available for digital download or streaming. While traditional ads or the ads that run on television are not present in a lot of these digital presentations, all product placements are--indicating that placing products on a show is the smarter investment long-term.

3.) Promotional films--Creating branded video content subtly promoting a product, such as the famed BMW Films campaign, is proving itself to be an attractive option for reaching customers turned off by push advertising. Increased video streaming gives advertisers more of an impetus for creating compelling content that viewers want to stream or download and gives creative independent talents a chance to shine...It's smart marketing and less offensive to commercial-sensitive viewers.

It's hard to find much fault with Madison & Vine's final call--for marketers to "take heed" and take advantage of an audience "hungry for programming." For advertisers and for media content producers, digital video not only provides a chance for revenues and a chance to provide consumers what they want but also makes possible an environment that better enables transmedia content and new forms of storytelling.

Thanks to fellow C3 media analyst Geoffrey Long for directing me to this article.

Posted by Sam Ford on June 29, 2006 at 11:00 AM in Advertising, Product Placement, Reviews, Technology, Transmedia
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