Video Advertising Still Set for Growth in Down Ad Spend Year

  |  April 28, 2009   |  Comments

Spending on digital video ads continues to surge, according to IPG's audience research group.

IPG's media and audience research group, Magna, forecasts a 32 percent increase in online video ad spending this year. The availability of more premium content and the continued rise of broadband penetration in the U.S. are factors in the anticipated growth.

According to the forecast, which represents a reduction from a previous estimate, video advertising revenues will rise from $531 million in 2008 to $699 million in 2009. Magna believes spending will exceed $1 billion by 2011, implying a compounded annual growth rate of 36 percent each year between 2006 and 2011.

Network and cable TV stations are aggressively pushing their programming online, creating high-quality environments of the sort that appeal to major advertisers, Magna observed. Streaming video aggregators like Hulu and Fancast are offering content from multiple networks, expanding alongside network-owned sites from NBC, CBS and others.

However premium video content still represents a limited volume of top-tier inventory. "Few large advertisers can achieve broad reaching objectives solely by using an online video-only campaign if there are any content preferences involved," the report states. In 2008, consumers watched 490 billion hours of traditional television, according to Nielsen. That represents a consumption rate 244 times that of professionally produced video watched on the Internet. In 2012, traditional TV will still account for 98 times more viewing time per individual than online video.

Advertisers are often reluctant to spend on user-generated content, another common video format, due to its unpredictable nature.

The rise of broadband penetration and other technologies have also boosted the video ad marketplace. Broadband now reaches over 75 percent of U.S. households.

"The chain of Internet video is only as strong as its weakest link," said Mark Makenzie, head of technology, media, and telecom venture capital firm AllianceBernstein, who was interviewed by the report's authors.

ClickZ Live San Francisco This Year's Premier Digital Marketing Event is #CZLSF
ClickZ Live San Francisco (Aug 11-14) brings together the industry's leading practitioners and marketing strategists to deliver 4 days of educational sessions and training workshops. From Data-Driven Marketing to Social, Mobile, Display, Search and Email, this year's comprehensive agenda will help you maximize your marketing efforts and ROI. Register today!

ABOUT THE AUTHOR

Enid Burns

COMMENTSCommenting policy

comments powered by Disqus

ClickZ Today is our #1 newsletter.
Get a daily dose of digital marketing.

COMMENTS

UPCOMING EVENTS

Featured White Papers

BigDoor: The Marketers Guide to Customer Loyalty

The Marketer's Guide to Customer Loyalty
Customer loyalty is imperative to success, but fostering and maintaining loyalty takes a lot of work. This guide is here to help marketers build, execute, and maintain a successful loyalty initiative.

Marin Software: The Multiplier Effect of Integrating Search & Social Advertising

The Multiplier Effect of Integrating Search & Social Advertising
Latest research reveals 68% higher revenue per conversion for marketers who integrate their search & social advertising. In addition to the research results, this whitepaper also outlines 5 strategies and 15 tactics you can use to better integrate your search and social campaigns.

WEBINARS

    Information currently unavailable

Jobs

    • Interactive Product Manager
      Interactive Product Manager (Western Governors University) - Salt Lake CityWestern Governors University, one of the 20 largest universities...
    • SEO Senior Analyst
      SEO Senior Analyst (University of Phoenix (Apollo Education Group)) - San FranciscoSEO Senior Analyst   Position Summary...
    • SEM & Biddable Media Manager
      SEM & Biddable Media Manager (Kepler Group LLC) - New YorkAs an Optimization & Innovation Manager at Kepler Group, you will be on the bleeding...