Ad It Up: Viewers Show High Tolerance for Online Spots

Consumers view 91 percent of ads in long-form video content

Despite being bombarded by an unprecedented fusillade of advertising, consumers of digital video content continue to display a high tolerance for sponsor messaging.

According to a new report from the video monetization firm FreeWheel, the online video environment is increasingly mimicking the experience of the age-old television ad model, as the standard pre-roll spot is giving way to a far more comprehensive break structure.

Upon serving up 10.1 billion video ads in the second quarter of 2012, FreeWheel concluded that long-form content is the most desirable environment for advertisers. Not only are spot loads on the rise—in the three-month period that ended June 30, long-form video content was studded through with eight ads on average, up 167 percent from three in the year-ago period—but viewers are also remarkably tolerant of the interruption.

Despite the heavier spot loads, users viewed 91 percent of the ads slotted within full-length episodic programming, a classification that includes 22-minute sitcoms and scripted dramas. Not only does that mark an improvement from 81 percent in the second quarter of 2011, but the 9 percent avoidance rate is superior to that of broadcast. Per Nielsen C3 ratings data, viewers of the Big Four nets skipped 13.5 percent of ads served during the 2011-12 season.

Total ad views in short-, medium- and long-form content were up 68 percent year over year. And while viewers of short video clips (sports highlights, music videos, etc.) once again demonstrated the least tolerance for ads, the Q2 acceptance rate of 69 percent eclipsed the year-ago 59 percent.

So long as consumers continue to accept the inherent tradeoff of ad-supported content—after all, a few sponsor messages are worth the price of admission for what would otherwise be offered as premium content—content providers are more than happy to simulate standard TV loads in the digital realm. And while pre-roll remains the dominant paradigm, mid-roll is on the rise. Not only did FreeWheel serve up 159 percent more secondary pods in Q2 than it did a year ago, but mid-roll spots now account for about a third of all available online video ads.

While the online space evolves to take on the characteristics of the dominant TV model, there of course is an event horizon beyond which it is impossible to add any more ad content without exasperating the consumer.

“It’s all about striking the right balance, and our customers continue to play with all the levers in order to be sure they offer the ideal spot load,” said JoAnna Foyle Abel, vice president of marketing at FreeWheel. “The trick is to monetize your content without disastrously eroding the viewer experience.”

Of course, that’s a trick that TV still hasn’t wholly worked out to anyone’s satisfaction, 70-year head start to the contrary. (Anyone who subscribes to basic cable can attest to the skull-clutching tedium of the Saturday afternoon movie—there’s nothing quite like investing two-and-a-half hours in a comedy with a 90-minute run time.)

Along with videos streamed on PC platforms, FreeWheel also monitors usage patterns on mobile devices (tablets, smartphones, et al.). Video views on handheld/non-PC devices doubled in Q2, accounting for 8.2 percent of all such consumption. (Thanks to the Olympics, Q3 deliveries are expected to soar even higher; through Monday, the mobile site had been accessed by 6.8 million unique users.)

Viewing on a PC or laptop increases throughout the day, peaking at 2 p.m. before gradually declining throughout the evening. Mobile and tablet views peak at around 10:30 p.m.

The FreeWheel report aggregates usage data for its clients, a roster of content providers that includes NBCUniversal, CBS, Fox, Turner Entertainment, Discovery Communications, A+E Networks and Univision Interactive Media.