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BizReport : Research archives : January 14, 2010

In-Stat: Advanced video ads to reach $5 billion

Between video on demand (VOD) and online video, marketers can expect another surge in video advertising. Advanced video advertising is predicted to grow to about $5 billion by 2013 according to In-Stat; a hefty jump that marketers should be ready for.

by Kristina Knight

instat.gifWhat is advanced video advertising? It is advertising tied into popular television shows, music, movies and other online content sources. From pay television to online video, marketers have a new opportunity to sponsor complete segments, shows or simply place advertising online as they did in the past with traditional cable and television ads.

"The online VoD industry has the early lead for delivering Advanced Video Advertising, but the Pay-TV industry is moving quickly and will surpass broadband VOD by 2012," said Gerry Kaufhold, In-Stat analyst. "Because Pay-TV services deliver qualified, repeatable audiences, we expect them to be able to negotiate higher Cost per Thousand (CPM) fees than online services."

Why such a strong growth clip? Because consumers are demanding it. Not only are consumers turning to online video hubs such as Hulu and YouTube in record numbers, but they are spending more time with online video and they are demanding more and more content. With the demand for more content it makes sense for networks, movie producers, music executives and others to not only provide that content but to earn money by placing ads along with the content. These same businesses may also require paid subscriptions for some content, but that is likely years away because consumers have shown a willingness to watch ads in exchange for programming but few have been willing to pay for that content.

Tags: advanced video advertising, In-Stat, online video, video advertising, video content

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