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BizReport : Advertising archives : January 10, 2012

Forrester: More ad dollars to video through 2016

Look for more advertisers to expand into online video or to push more ad dollars into the video space. Online video, finds Forrester Research, will become a bigger deal for many advertisers through 2016; they expect ad spending to increase more than 200% for the video category.

by Kristina Knight

As more people switch their viewing habits from traditional television to online media advertisers are following suit. Yes, the biggest programmers are still network and cable television stations, but more and more of that TV content is being consumed online.

YuMe has announced it will partner with Samsung to provide advertising for their Smart TV; one of the first brands to sign on is State Farm Insurance. Along with powering the ads, YuMe is conducting the first connected TV Brand Lift study to determine how consumers engage with ads and how that impacts their feeling about the brand.

A recent forecast from Forrester Research predicts digital video advertising (US) will reach at least $5.4 billion by 2016; in 2011 digital video ads pulled in $2 billion. Why the dramatic increase? The evolution of mobile and video-friendly devices, primarily, along with an increase in professionally produced video content. Younger viewers are used to watching programming on their schedule - whether TiVo'd or streamed online - and that audience behavior is increasingly seen in older viewers, too.

Those behaviors are pushing cable and broadcast networks as well as online-first producers to increase the amount of 'safe' online content and that, in turn, is pulling more advertisers into the space.

Some interesting findings from Forrester:

• 37 million US households have at least one connected device, allowing for the viewing of digital content
• Connected device penetration is expected to reach 50% of US households by 2016

In November comScore noted nearly 41 billion online video clips were viewed by the US audience; on average US viewers spend more than 20 hours each.

Tags: comScore, Forrester Research, online video, video advertising, video content, YuMe

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