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Video Ad CPMs: It Pays to Be a Pro

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It’s pros before average Joes when it comes to online video ad revenue. That’s the word from a study just released by The Diffusion Group, which forecasts that professionally produced content will grab most of the $590 million video ad market today and the $10 billion video ad market of the future through consistently higher CPMs that those garnered through user-generated content. TVWeek recaps the findings:

  • CPMs for professional long-form video are about $40 now and predicted to rise to $46 by 2013.
  • CPMs for professional short-form video are roughly $30 now and expected to hit $34 by 2013.
  • UGC vids currently get $15 CPMs and are seen rising a little, to $17, by 2013.

Professionally produced content includes work by studios, networks and new media companies like Revision3.

We’ve written before that UGC is expected to account for 42 percent of all streams but only get 4 percent of the video revenue for the next five years, while professional content is forecast to account for 58 percent of all streams and gobble up 96 percent of the revenue. And now we have a better understanding as to how that breaks down.

With speculation running high that YouTube can only monetize 3 percent of its content, this CPM data makes it even more clear why the video-sharing site is doing deals with the likes of Lionsgate.

6 Responses to “Video Ad CPMs: It Pays to Be a Pro”

  1. We definitely need to dive further into this, and I will more than likely write a blog post over the weekend…

    Something that I think is being overlooked in the cost to produce content. At even a $50 CPM, each episode will need to garner tens of millions of views to be able to produce quality long-form content (i.e. not reality shows like “Beaty and the Geek”), unless we accept the Networks simply repurposing what they’ve already aired. It’s basic math — production budgets are often much more than $1M per episode.

    It’ll probably come down to “snack-sized” original content for the next few years, until a convergence actually occurs. I think shows like Epic-Fu, Tiki Bar TV, and the like, can be financially successful with lower CPMs ($10-30) and lower viewerships (<5M).

  2. So some UGC videos are getting $15 CPM, but still UGC counts towards only 4% of the total web video ad market. I wonder which user generated videos are getting into this $15 CPM action, and which are simply getting $0?