Online Video Ad Spending To Hit 4 Billion

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Online Video Ad Spending To Hit $4 Billion

By: Mike Sachoff
2009-08-14

Online video viewing is increasing steadily and advertising spending is following suit, according to a new report from eMarketer.

Online video ad spending is on track to nearly quadruple from more than $1billion this year to more than $4 billion in 2013. Still, most people will not spend a long period of time watching video on their computer screens, but they will on their flat-screen TVs.

Online video ad spending is small in terms of absolute dollars compared with TV. For every $1 marketers spend on Internet ads in 2009, they will spend nearly $65 on TV commercials. But, online video is ahead in terms of dollars spent per hour of content viewed.

eMarketer forecasts that TV advertisers in the U.S. will spend only $0.13 per hour of viewing, while their online video counterparts will spend 38 percent more, at $0.17 per hour.

"By 2010, the difference between Internet video's and TV's spend per hour will start to even off-which indicates a potential tipping point for online video advertising," said David Hallerman, senior analyst and author of the report "Digital Video Advertising: Where's the Money?"

In order for Internet video to grow more quickly, it needs to reach an inflection point where online video and TV video have significantly converged.

"In the lean-forward computing mode, people are mousing and ready to click at the slightest provocation," said Mr. Hallerman.

"In the lean-back TV mode, while people may certainly click with the remote, they tend to spend extended time with the content and absorb messages with a more receptive frame of mind."

Matching ad spending to viewer eyeballs in a ratio on par with TV will support online video ad spending growth, making the generally higher CPM pricing for online video more acceptable to many marketers.

About the Author:
Mike is a staff writer for WebProNews. Visit WebProNews for the latest ebusiness news.


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