Do PR teams reread press releases? MSFT today announced a partnership with Digg, and in the press release states it’s the exclusive provider of advertising on Digg:
As part of the relationship, Microsoft will be the exclusive provider of display and contextual advertising on Digg. The two companies also agreed to work together on future technology and advertising initiatives.
“Our collaboration with Digg is about bringing our advertising technology and sales force to one of the fastest-growing sites on the Web and a true innovator in user-generated content,” said Steve Berkowitz, senior vice president of the Online Services Group at Microsoft. “We believe advertisers will welcome Microsoft and Digg’s combined strengths to forge more meaningful connections online.”
Microsoft and Federated Media Publishing, Digg’s current advertising partner, plan to collaborate to bring integrated programs to Digg’s users and advertisers. “Federated Media has unique advertising sales assets that dovetail with our efforts, and we look forward to working with them,” Berkowitz said.
How does that make sense? In my experience working with ad reps, this is ripe for conflicts and stepping on of toes… See John Battelle, Chairman of Federated Media’s post here. Our earlier post on Did MSFT Dig a Deeper Hole here.
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WatchMojo NewsletterI just posted something on the latest stats for online video ads. By 2011, the magic figure is now $10B.
$10B. That’s crazy. Don’t get me wrong, as a video producer I love hearing it, but consider this:
An estimate of the online video ad market for 2009 - set in 2004: $657 million
(Source)
An estimate of the online video ad market for 2009 - set in 2005: $1.5 billion
(Source)
An estimate of the online video ad market for 2010 - set in 2006: $2.3 billion
(Source)
An estimate of the online video ad market for 2010 - set in late 2006: $3 billion
(Source)
Wow. What happened in one year for the latest estimate to soar from $3B to $10B?
Anyone?
Couple of interesting stats from different sources:
Pew Internet & American Life Project via Mediapost:
Almost one in five online adults, or 19%, now watch Web video on a typical day, while 57% have viewed online video at least once. That’s according to new research by the Pew Internet & American Life Project.
“The growing adoption of broadband combined with a dramatic push by content providers to promote online video has helped to pave the way for mainstream audiences to embrace online video viewing,” states the report, which was based on a recent telephone survey of 2,200 adults.
Online video was most popular with young users, with 31% of those between 18 and 29 saying they view clips on a typical day. For people between 30 and 49, that proportion was 18%, while just 12% of 50-64s and 10% of senior citizens watched Web video on an average day.
What are they watching? News clips topped the list, with 37% of respondents saying they had seen such content, followed by comedy at 31%. Movies and TV shows came in No. 3, at 16%.
The report also confirmed that Web video often spreads virally, with 57% of respondents saying they had shared links to clips.
How do people really feel about much-touted user-created clips? Overall, the reaction is lukewarm: Most users, 62%, said they prefer professional content, while just 19% said they like those made by consumers. But when researchers just looked at men ages 18-29, those numbers didn’t hold. Less than half of the young men interviewed, 43%, said they prefer professional video online, while 34% said they prefer clips created by users, and 19% said they like both.
Understanding & Solutions via PaidContent.org:
Advertising on internet TV channels could yield worldwide revenues of up to $10 billion in 2011, according to a report from Understanding & Solutions. That would make up 18 percent of what the forecast says will be a $60 billion internet advertising industry by then. Online TV ads contributed just $400 million in revenue in 2006, part of a $25 billion industry.
What kind of Orwellian name is Understanding & Solutions, by the way?
More importantly, what’s up with the rapidly increasing predictions for the online video market? $10 billion in 2011. Read my follow up post on the rapid spike in forecasts here.
MSFT just added a lot more unsellable, low qualilty inventory by signing up to sell some of the ads on Digg. Digg’s a neat site, but as an advertising platform it’s just not optimal. Digg, who is larger than Facebook when measured by uniques according to this post by Compete.com, offers MSFT more of the same: bad inventory.
Bear in mind that YHOO got nailed by GOOG because GOOG’s monetization rate on clicks was superior, by securing all of this low quality ad inventory, I’m just not sure if MSFT is going about tackling the online advertising juggernaut the right way.
