Online video ad spend forecast to rise

Spending on online video advertising is expected to rise over the next couple of years, according to a new report from online video ad network, LiveRail.

by Helen Leggatt

LiveRail’s recently released “State of the Industry” report found that while online video ad spend growth is slowing, projections for growth over the next year or so remains healthy. The online video ad network forecasts a growth rate of 67% this year, versus 73% in 2007.

Online video advertising currently accounts for just 2.36% of all online ad budgets. This, says LiveRail, will rise to 3.86%, or over $1.3 billion, by 2010.

There are encouraging signs for advertisers contained within LiveRail’s report, namely that 30 second pre-roll video ads are watched through to completion 84% of the time and click-through rates for them are at 11.5%. Video ads launched by a consumer clicking on an overlay ad have a 90% completion rate.

Six key issues facing the online video ad industry are identified by LiveRail including a confusing array of ad formats, campaign measurement, third party ad serving and inconsistent terminology.

“While the IAB has made steps to tackle some of these issues, the nature of the organization does not permit it to insist on these standards, nor does it always provide the simplest solution; given its desire to satisfy the broad (and often diverging) variety of its member’s interests,” says the report (.pdf).

“Additional consolidation of vendors and the emergence of market leaders may help resolve some of these issues.”

Tags: ad format, campaign measurement, online video, video advertising

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