Commercials Increasing Online in 2014

Facebook, Twitter will boost growth of digital video ads.

Facebook will soon feature video advertising, and spending on online video ads is expected to double in the next two years.
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Online video strategies by Facebook and Twitter will help increase the growth of video advertising on websites, as brands become more sophisticated in the ways they reach customers and Web portals seek new sources of ad revenue.

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Twitter launched a new digital video partnership with Comcast in November called "See It," which allows subscribers of Comcast's Xfinity TV to access shows and movies, and record programs on DVRs. Facebook on Tuesday announced that it would begin showing commercials on its news feed, testing the video with a small number of users. The videos will play automatically without sounds for that test audience as they scroll through the news feed "Since September, we've been testing a way to make videos more engaging on Facebook, and as a result we've seen views, likes, shares and comments increase more than 10 percent," according to a statement from Facebook.

Digital industry research firm eMarketer predicts viewership of digital video will total 75 percent of Internet users for the end of 2013. Online video ad spending in the U.S. will likely double from $4.14 billion by the end of 2013 to $8.04 billion by 2016, according to eMarketer.

Video can be tedious to load because of poor Wi-Fi connection speeds, which could irritate the patience of users, so digital video will not grow as fast in 2014 as advertising designed for mobile devices, says Andrew Frank, a digital advertising analyst for market research firm Gartner.

"It won't be a rapid shift from TV to online video but there will be a steady increase," Frank says.

Watching online video can also drain the battery life of a mobile device, so digital video advertising will likely be more successful on desktops and tablets, but will not reach as many customers on mobile phones, Frank explains. Improving speeds and energy use of devices will eventually expand the viewership for online video, but Web developers and companies also need to agree on a standard type of code that allows video to be shared between websites, Frank explains. Online video is also a new medium, so a new style of advertising is emerging to attract audiences.

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"For Facebook and other sites to be successful they have to be more sensitive about matching up the interests and contexts of the ads so they are relevant and not annoying," Frank says. "You have to create ads that are customized, rather than a TV ad that will be one size-fits-all."

Advertisers are designing more interactive videos for websites using online behavior history to help predict ads people might want, but also using techniques including tabs on a video like quizzes, games or links to a purchasing site, says David Clarke, a digital strategy principal for PricewaterhouseCoopers consulting firm.

"Websites monitor site behavior almost hourly. People vote with how much time they spend on a site and they vote with their mouse," Clarke says. "This is the year social media needs to establish itself as an impact player in e-commerce. Digital video is going to help them with that."

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