by Jimmy Lim
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Online video advertising spending in the US will nearly triple to $640 million in 2007, surging way past this year’s $225 million mark, according to a report by market research firm, eMarketer. By 2009, video ad spending is expected to reach $1.5 billion, an impressive increase of 567 percent in just four years. The flood of new ad dollars are likely to be sourced from both Internet and TV budgets, as an increasing number of advertisers and agencies begin to approach the two segments as working in tandem.
Such forecasted growth reflects the widely reported heavy demand among advertisers in the fast-emerging broadband segment, which is experiencing an inventory shortage. The growth in spending will also be fueled by a sizeable increase in the number of broadband-connected households. By 2008, it’s projected that more than 69 million US households will have adopted broadband access, which is more than double the figure of 34.3 million seen in 2004. Such an upsurge in the number of broadband users in effect provides advertisers with a new online "mass" audience.
"Online video advertising used to be an oxymoron, but no more," says David Hallerman, Senior Analyst at eMarketer and author of the report. Hallerman states, "Video represents common ground for television and the Internet, not a field of battle." Besides the fact that TV ads are easily transferable to online video, both mediums complement each other very well. Along with more innovative content delivered to larger markets, broadband and television have an opportunity to form a mash-up of sorts, providing instant-user information, tracking, and performance evaluation.
For instance, online video advertising will allow marketers to utilize the Internet’s ability to track consumers in ways that match up TV commercials with online (and offline) activity. Traditional broadcast or cable advertising has lacked such a benefit, instead employing a fishing approach to attract customers.
Online video advertising stands apart from most mediums, as it allows marketers to incorporate several styles of marketing/advertising by blending paid search, branded entertainment, viral marketing, consumer generated media, and behavioral targeting. Hallerman said it best, stating that it “[combines] the content offered on the tube with the control individuals take for granted on the Internet."
Sources:
http://www.marketwire.com/mw/
release_html_b1?release_id=102438
http://www.webpronews.com/topnews/
topnews/wpn-60-20051129OnlineVideoAds
WillGrowWithBroadband.html
http://www.mediaweek.com/mw/news/interactive
/article_display.jsp?vnu_content_id=1001572349
Jimmy Lim
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