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.

View All Articles by Mike Sachoff

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


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