New Projection Shows Video Ad Surge

Over the next four years, the video ad market is expected to boom according to research firm eMarketer, but the biggest boom is expected next year. eMarketer.com is projecting an 89% increase in online video ad revenue in 2007.

by Kristina Knight

The projection estimates that the online video ad spend will hit $775 million next year. By 2010, eMarketer expects the spend to jump to $2.9 billion, that is an expected 11% of all online ad dollars.

David Hallerman, eMarketer Senior Analyst says a large portion of the growth is due to Google’s purchase of YouTube. "The aftershock of that mash-up will, all by itself, contribute greatly to Internet video's growth with products akin to AdWords for Video," he wrote in the new report (via MediaPost).

Online video revenue is expected to grow 45% through 2010, the biggest bump is expected next year, with an expected 89% boost in online video ad revenue. In comparison, the entire online ad spend is only expected to grow 15% and rich media revenue is expected to grow nearly 41% in 2007.

Even with the revenue increases, online video spending isn’t close to traditional television advertising. The online video spend is about half of a percent of what is spent in television.

Tags: Google, online video, online video advertising, YouTube

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While the video ad market is starting to explode, it will be interesting to see how consumers respond to it, as some studies are showing that there is some resistance by people to commercials embedded in their viewing experience.

Posted by: Gary Bourgeault (thealphamarketer.com) on November 7, 2006 22:17