By Rob Young

This is a story about the disconnect that currently exists between consumers’ deep and growing engagement with internet video, which we’ll call I-Video, and advertisers’ low level of investment in this media channel.

Consumer time-spent and advertiser money-spent actions are often intrinsically linked in our business. For example, when the eye-popping audience numbers rolled in last week for the October 12th season premiere of The Walking Dead, you could almost hear the sounds of cash registers ringing over at AMC’s finance department. Such is the responsiveness between measured TV audience behavior and the exchange of money between buyers and sellers of TV time. The audience goes up, the rates go up and the TV revenue goes up.

The same is true in the radio business. Radio morning show audience goes up, the 30-second commercial rate goes up and the radio station’s ad revenue goes up; often within a week’s time.

But the instantaneous give and take between consumer attention and ad spending we see in the TV/radio buying and selling world doesn’t apply to all platforms. A most dramatic and unusual example of “media disconnect” can be seen in the massive gap that exists between the amount of time consumers spent (15% share of time) and the amount of money (1% share of revenue) advertisers allocated to the I-Video medium in 2013.

The big number – the 15% share of time – reflects adults 18+ minutes per week with I-Video (according to Comscore’s Video Metrix data) expressed as a percentage of total media minutes (sourced from Numeris, PMB and NADbank). The little number – 1% share of revenue – stands for the share of ad revenue  advertisers are allocating to I-Video, according to IAB figures.

Here’s where those numbers come from. Adults spend around 12 hours per week with I-Video and that compares to a total of 79 hours of total media time per week (including simultaneous media consumption). That works out to a 15% share of time. The IAB tracked $146 million in I-Video ad revenue in 2013 which compares to $11 billion in total ad revenue (TV, radio, internet, newspaper, magazine) and that works out to a relatively small 1% share. Some might consider the I-Video definition for determining revenue to be overly restrictive; so double the I-Video revenue number if you like. A 1%-2% share of revenue is shockingly low compared to a 15% share of time.

So why the gap?

We’ve seen gaps between consumer and advertiser media behaviour before. Gaps can exist because of efficiency and inventory provisos. For example, advertisers have never matched the consumer’s distribution of time between specialty and conventional TV genres. The two share patterns creep ever closer but share parity is still some way off.

Sometimes a gap occurs due to a valued media characteristic like daily newspaper’s deep daily reach, which explains the disparity we see between relatively low weekly time counts and those hefty daily newspaper ad revenue levels. This is a reverse gap – more revenue than time.

I-Video’s gap, however, is unique in both magnitude and nature. It is a gap caused by accelerated rates of consumer adaption. In a matter of a few years internet video consumption has jumped from PCs to tablets and smartphones, to game consoles and to new smart TV sets. Internet measurement services are constantly upgrading in an attempt to keep up with the consumer’s hunger for I-Video content. Compare this to the marketer’s year-long fiscal planning frames and ingrained conservative decision-making nature.

It will be some time before marketers can catch up to the exponential growth in the amounts of time consumers spend with I-Video. And so opportunity knocks for the open-minded marketers who have budget flexibility and media negotiation know-how.

The key opportunity for the marketer who can move now is the lack of competitive heat. As more and more advertisers fill the field of commercial avails, the task of connecting and engaging with consumers becomes more difficult. Increases in competitive messaging shortens the amount of time between commercial airing and commercial forgetting (ad stock reduces and message recall half-life decreases).

But in the cooler, lower-clutter environs of I-Video, messages live longer and echo out over extended periods of time.

And that’s the long and short of it. And the big and the small of it.

Rob Young is SVP, director of insights and analytics at PHD