Online video ads cost 38 percent more than cable, report says

Cable advertising types worried about losing ground to online video may be heartened to know that cable ads are cheaper than online ads, according to data compiled by media research firm SQAD.

SQAD, based in Tarrytown, N.Y., bills itself as "the largest independent source in the U.S. for TV, radio and digital costs and analysis."

By comparing four media bases--display, cable TV, network TV and in-stream video--SQAD determined "the average CPM for an in-stream online video advertisement in 2013 was $23.03, or 38 percent higher than the average A18-49 CPM for cable TV."  The research determined that network TV was the most expensive advertising medium.

The average cost of a primetime cable TV ad increased by 5 percent in 2013 to $15.63. Online, the most money went to TV network websites with NBCUniversal, CBS Television and ABC Television averaging a CPM rate of about $30 for online ads.

The research does not all bode well for cable.

"In many cases, online premium inventory is still somewhat limited so it's not that surprising that rates are high right now," SQD CEO Neil Klar said in a press release.

If anything, the data may offset some sky-is-falling predictions such as those posited in a Wall Street Journal blog that suggested Web video outlets "see vulnerability in second tier cable networks" and are working on one-on-one comparisons between the Web and cable TV.

YouTube and Google (Nasdaq: GOOG) were among the more aggressive online players hoping to ding cable's ad business. The blog post said that Google was the more aggressive of the pair and "has been selling directly against cable networks."

A cable executive conceded that online video advertising is "competitive" but called it "more complementary at this point."

Colleen Whitney, media director for North American video at Digitas, was more succinct.

"You are absolutely seeing them sell aggressively against cable more than ever before," she said.

Amanda Richman, president of Publicis Groupe's Starcom, however, noting the SQAD research, said that cable's lower price still gives it the advantage even though "there's been a steady drumbeat toward Web video, which offers more fluidity."

For more:
- see this press release
- The Wall Street Journal has this blog post

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