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Online Video Advertising: Google's acquisition of YouTube was
just the beginning
The following article
can be found on eMarketer.com at the link below:
The American Association of Advertising
Agencies (4A) saw it coming. In December 2005, when 4A members were
asked which form of "new media" would show the greatest growth in 2006,
half replied Internet video.
This year, eMarketer estimates that spending for online video
advertising will reach $410 million, an 82.2% gain over last year's $225
million figure. In two more years, US marketers will spend over $1
billion, and only two years after that (in 2010), Internet video
advertising will be a nearly $3 billion business.
"Let's keep these dollars and percentages in context, however," says
David Hallerman, eMarketer senior analyst and the author of the new
Internet Video: Advertising Experiments & Exploding Content report.
"Even with such strong spending increases, online video still makes up a
small share of Internet ad expenditures. In 2006, with all the hue and
cry about video on the Web, that ad format will contribute only 2.6% to
this year's $15.9 billion total."
By 2009 and 2010, however, as online video advertising becomes as
mainstream as Internet advertising, its share of the pie will rapidly
surpass the 10% mark.
"When you consider that video ads are more costly than static display
ads, for instance, or most paid search campaigns," says Mr. Hallerman,
"getting to such a point with spending will not necessarily indicate
more video ads than for other formats."
What will support spending growth rates of 89.0% next year and 45.0% or
higher in each of the following years?
"First, the desire among companies both large and not so large — and
their agencies — for targeted ad messages using creative they are
familiar with: video," says Mr. Hallerman. "Secondly, advertisers have
long favored television as their marketing medium, and extending that
preference to the Internet is a logical leap. Finally, with video ad
spending coming from such a small base, high percentage gains are
readily reached."
And do not underestimate the Google Factor.
"As the main engine of Internet advertising, with its 25% share of the
US total in 2006, Google's major play in purchasing YouTube will mean
new models — such as AdSense for Video, or whatever it is called — for
monetizing the scads of video content migrating to the Web," says Mr.
Hallerman.
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