TV + Online Video: The Best of Both Worlds

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1 WHITE PAPER: Share-shift Analysis TV + Online Video: The Best of Both Worlds FEBRUARY, 2011

2 EXECUTIVE SUMMARY Online video ad spending increased by 40% 1 in 2010 as an increasing number of advertisers embraced the medium. Even with explosive growth and mass-market penetration, online video still represents only a small percentage of marketers overall media mix. Media planning across different media continues to be a challenge; but if video buying is planned holistically, independently of the screen on which it appears, the results are significant and compelling. YuMe set out to demonstrate that reallocating 5%, 10%, or 15% of a TV buy to online video can not only improve reach, effective reach, and frequency, but can also lower the overall campaign CPM. YuMe s Online Video Share-shift Analysis proves that online video campaigns complement TV campaigns, and that the combined effect is more than the sum of its parts. METHODOLOGY YuMe s Online Video Share-shift Analysis incorporated Nielsen TV/Internet Data Fusion, which integrates Nielsen s National People Meter Panel with the Nielsen Netview panel to obtain a clear picture of cross-platform reach, along with the following: Nielsen National Television Ratings, Nielsen Monitor-Plus, and Nielsen IMS software. The statistics featured in the Online Video Share-shift Analysis are based on the selection of a representative consumer packaged good (CPG) food brand that had a $4.5 million investment in National TV (Network, Cable and Syndication) during the month of January Using Nielsen IMS software, the delivery of the advertising schedule was calculated against the CPG brand s presumed demographics: primary, Women 18 to 54, secondary, Women 25 to 34, and tertiary, Men 25 to 34. As part of the share-shift analysis, three budget reallocation scenarios were examined: 5%, 10%, and 15%. Based on the campaign strategy and demographic cues from the TV plan, these ad dollars were then reallocated from TV to YuMe s video ad network, targeting the best mix of video content that reached the CPG brand s desired audience. KEY FINDINGS Across all three audience demographics (Women 18-54, Women 25-34, Men 25-34) the share-shift analysis found that as dollars were reallocated from TV to YuMe s video ad network, the CPG brand increased its overall reach and gained access to viewers they would not have reached with TV alone. Key results achieved include the following: Total campaign reach increased with no additional spend Effective 3+ and 6+ reach increased in all scenarios Multi-platform exposure and performance increased dramatically as shift occurred CPMs decreased significantly across all ad spend reallocation levels (5%, 10%, 15%) The results demonstrate that while marketers can reach the majority of their audience through TV, they can improve both the efficacy and efficiency of their television campaigns by adding an online video component. 1 emarketer, Online Video Ad Spending, November

3 A MEDIA PLAN GREATER THAN THE SUM OF ITS PARTS Television continues to command the dominant share of viewers, but as audiences continue to fragment across devices, it becomes increasingly difficult to achieve a brand s desired reach and effective level of exposure for its message. For example, as illustrated below, television s against the brand s target audience of women 18 to 54 is 57.9 MM. By adding YuMe s online viewer reach of 14.9 MM for Women 18 to 54, a marketer gains access to 1.7 MM incremental viewers, who otherwise would not have been exposed to the advertiser s campaign, providing a combined TV plus online reach of 59.6 MM. Total Campaign Reach Increases with No Additional Spend (10% share-shift scenario) W Total Reach TV + Online = 59.6 MM 14.9 MM Internet 1.7 MM Viewers Gained W Total Reach TV + Online = 14.8 MM 57.9 MM Television 3.9 MM Internet.5 MM Viewers Gained M Total Reach TV + Online = 13.5 MM 14.3 MM Television 3.1 MM Internet.5 MM Viewers Gained 12.9 MM Television Source: Nielsen TV/Internet Custom Data Fusion January 2010; based on YuMe 10% share-shift case studies for W 18-54, W and M

4 Across all three audience demographics, the share-shift analysis found that as dollars were reallocated from TV to online, the CPG brand increased its overall reach and gained access to viewers they would not have reached with TV alone. The original schedule utilized by the CPG brand reached 75.4% of Women 18 to 54, 72.6% of Women 25 to 34 and 65.9% of Men 25 to 34. Although the ad campaign s reach increased across the board, it peaked against the primary demo of Women 18 to 54 when 15% of dollars were reallocated to online video from TV. Total Campaign Reach % 80% 75% 70% 65% W W M MULTI-PLATFORM EXPOSURE & PERFORMANCE INCREASES DRAMATICALLY AS SHIFT OCCURS When a viewer is exposed to a campaign across multiple screens, brand metrics increase dramatically. Brand recall increased from 62% for ads seen solely on television to 82% for ads viewed across both TV and online. Brand Recall by Type of Ad Exposure 90% 80% 70% 62% TV Ad Only 82% TV Ad + Online Ad Source: Nielsen IAG , A18+. Exposure based on 30-day window. 3

5 How much budget should be reallocated from TV to online video is a question unique to each brand. However, the analysis conducted for the CPG food brand demonstrates the compelling results achieved when TV and online video work together. Note, in the 15% share-shift scenario, 20.6% of Women 18 to 54 were reached on both TV and online and the overall reach increased from 75.4% to 77.5% when they were exposed across both screens. To achieve this 2.1% increase through TV alone would require an additional investment of $200,000-$250,000. Women Reach (5%, 10%, 15% share-shift scenario) 80% % 70% % 55% Exposed on TV Only Exposed Online Only Exposed on Both Women Reach (5%, 10%, 15% share-shift scenario) 75% 70% % 55% 45% Exposed on TV Only Exposed Online Only Exposed on Both 4

6 Men Reach (5%, 10%, 15% share-shift scenario) 70% % 55% 45% Exposed on TV Only Exposed Online Only Exposed on Both EFFECTIVE REACH INCREASES DRAMATICALLY AS SHIFT OCCURS Many brands struggle to reach their audience at optimal levels of exposure, also known as effective frequency. Conversely, brands can see diminished returns as their campaign frequency increases. Therefore, it is critical to understand the effective frequency and optimal exposure to a brand s message. As the illustrative example below shows, effective exposure typically occurs after seeing an ad three times. However, additional exposure above 3+ is often necessary to drive campaign performance. Effective Exposure % Reach Number of Exposures 5

7 Effective 3+ reach for the CPG brand increased in all three share-shift scenarios (5%, 10%, and 15%) when dollars from a fixed advertising budget were reallocated from television to YuMe s video ad network. Women Results (Effective 3+ and 6+ Reach) +6.2% % +10.2% 30% % 10% Women Results (Effective 3+ and 6+ Reach) 40% 30% 20% % % % Male Results (Effective 3+ and 6+ Reach) 40% 30% 20% 10% +8.8% %

8 CPMS DECREASE SIGNIFICANTLY IN EVERY SCENARIO With the ability to optimize the campaign out of less efficient TV placements while still increasing reach and effective reach through premium online video content on YuMe s network, marketers achieve a significant by-product: a dramatic reduction in average CPMs for the campaign. Women $9.78 $ % decrease $9.09 $8.85 Women $46.82 $44.49 $ % decrease $40.78 Men $68.66 $ % decrease $62.23 $

9 Overall, the optimal scenario for the CPG food brand was to shift 15% of TV dollars to online video. Reallocating 15% of TV advertising dollars to YuMe s video ad network significantly impacted the overall delivery of the campaign across multiple metrics, but most importantly, significant gains were achieved against their primary demo of Women 18 to 54 a 2.7% increase in reach, a 6.2% increase in 3+ reach and a 20.6% gain in two-platform reach. Additionally, the overall campaign CPM went down from $9.78 to $8.85, a 9.5% reduction. 15% Shift of TV Dollars to YuMe s Video Ad Network W18-54 W25-34 M25-34 Reach +2.7% +3.3% +3.5% Average Frequency +7.6% +11.1% +11.0% 3+ Reach +6.2% +8.8% +8.8% 6+ Reach +10.2% +14.9% +17.2% Total GRPS +10.5% +14.8% +14.8% CPM -9.5% -12.9% -12.9% 2-Platform Reach +20.6% +20.7% +15.6% 10% Shift of TV Dollars to YuMe s Video Ad Network W18-54 W25-34 M25-34 Reach +2.7% +3.2% +3.5% Average Frequency +5.0% +7.1% +6.6% 3+ Reach +5.5% +7.6% +7.7% 6+ Reach +8.2% +11.7% +12.8% Total GRPS +7.7% +10.5% +10.3% CPM -7.1% -9.5% -9.4% 2-Platform Reach +17.2% +17.4% +13.1% 5% Shift of TV Dollars to YuMe s Video Ad Network W18-54 W25-34 M25-34 Reach +1.8% +2.2% +2.5% Average Frequency +2.2% +3.0% +2.6% 3+ Reach +3.4% +4.7% +4.8% 6+ Reach +4.6% +6.3% +6.6% Total GRPS +4.0% +5.2% +5.2% CPM -3.8% -5.0% -4.9% 2-Platform Reach +11.7% +12.0% +19.1% 8

10 CONCLUSION Online video ad spending is projected to increase 39% in 2011, totaling $2 billion. 2 And, online video consumption has now reached the point of mass market penetration across all demographic and age groups, making in-stream video advertising an essential element of a marketer s media mix. As YuMe s Online Video Share-shift Analysis demonstrates, online video is a critical complement to television advertising. By simply reallocating a percentage of TV budgets to online video, marketers can maximize effective reach, effective frequency, two-platform reach, overall reach, and CPM efficiencies without increasing their ad budgets. Shifting a portion of television dollars to online video and planning video campaigns holistically across multiple screens will be vital for marketers to drive optimal campaign results in 2011 and beyond. By educating the marketplace of the powerful additive effect online video delivers relative to a TV buy, YuMe is demonstrating the importance of planning video holistically, independent of the screen it appears. There is clear evidence that a well-planned campaign combining online video and television is greater than the sum of its parts. ABOUT YUME YuMe is a video advertising technology company that makes professional video profitable for publishers and effective for advertisers. Its robust ACE technology powers both its premium ad network and its industry-leading advertising management solutions, ACE for Publishers and ACE for Advertisers. YuMe s premium ad network aggregates the best video content, representing hundreds of premium publishers. As a result, YuMe gives publishers and advertisers unprecedented reach, brand safety, contextual relevance, controlled syndication, and consistent delivery across all digital media platforms Web, downloads, mobile, and connected TV. YuMe is a privately held company headquartered in Redwood City, CA and backed by Accel Partners, BV Capital, DAG Ventures, Khosla Ventures Menlo Ventures and Intel Capital. To learn more, please contact 2 emarketer, Online Video Ad Spending, November

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