Online video CPMs are north of $15 July 24, 2008
Posted by jeremyliew in advertising, user generated content, video.trackback
TV Week reports on a new report from the Diffusion group on video advertising:
Professional Web programming yields very high CPMs, the report found. The CPMs for long-form online content are $40 today and will reach nearly $46 in 2013. Meanwhile, CPMs for short clips are clocking in at about $30 and will rise to a little over $34 in five years.
The CPMs for user-generated video will have the smallest rise, from only $15 today to about $17 in 2013.
While many have viewed this negatively because User gen video ad rates are lower than professional programing, I think that $15 CPMs with no content creation costs sound pretty good to me!
Lightspeed Venture Partners Blog 
I don’t buy these numbers and I wouldn’t bake these into anyone’s projections. These numbers couldn’t possibly include YouTube which has what ~70% share of UGC video content and is not currently monetizing the vast majority of their video. So does this $15CPM represent the small sliver that is not YouTube? And if YouTube were to monetize and bring its fill rates up on UGC video, CPMs across the board would plunge to the floor.
I looked for the report or a press release from Diffusion Group, and couldn’t find it. Anyone have any luck?
All I found was this press release from April that didn’t give me much confidence: http://www.tdgresearch.com/TDG_Opinions_VN_Advertising_Reality_041108
The Diffusion Group analyst: “I used to think I was pretty good at math, but after trying to make sense of recent forecasts regarding web video advertising, I’m beginning to doubt my skills…(and then concludes)…without accurate revenue and usage estimates, it is impossible to know the real value of any form of advertising, much less an emerging model such as web-based video advertising.”
Total Balogney….
The important fine print here:
5% sell-thru rate, meaning a tiny percentage of video is seeling out at CPM’s over $10…..the vast majority going under or un-monetized.
Still experimental dollars at work here, no big RFP’s ….yet.
If Google is doing 1 billion video views a day but only making $200 million a year (Forbes), then that’s… hmmm… not $15. Gee, let’s see if I can do that figuring in my head. Is that really a .0006 CPM? You’re the VCs, you do the math.
[…] a VC salivate about the fact that some social media CPMs are $15 and headed to $17 — “I think that $15 CPMs with no content creation costs sound pretty good to me!” […]