While online advertising as a whole has been seeing immense growth, its video component has always lagged behind. However, there are signs that this may be changing soon. Recently, video ad company LiveRail released their quarterly report on the state of online video advertising. They predict that industry spending in the US alone will go past the $1 billion mark in 2010. While that’s still a small fraction of the $36 billion total projected online ad spending for that year, it represents a net increase in market share for video.
Knowing is half the battle, and in the report, LiveRail cites six major issues that the industry must resolve in order to move forward, as well as steps being taken to address them.
- No true 3rd Party Ad Serving
- Reporting Discrepancies
- Confusing array of ad formats
- Non-standard Integrations
- Inconsistent Terminology
- Measuring Effectiveness
Meanwhile, eMarketer offered their own projections which, though similarly optimistic, have slightly lower figures for online video ad spending. They also cited a study made by The Conference Board and TNS which focused on the reasons people watch TV online. In this survey of US households, the most common reason is convenience, because they can watch it whenever they want. Below is a comparison chart of the 2007 and 2008 survey results.
Perhaps the best news to come out of this study for Internet marketers is the decrease of the number of people who watched online video to avoid commercials. It may be too early to talk of a trend with the data they gathered, but eMarketer thinks it could be a sign of increasing public acceptance of commercials as a necessity to sustain quality content. Whatever the case, there are still pressing issues that need to be dealt with by industry players, but with any luck, this segment of the online ad market may see explosive growth in the years to come.
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