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November 29, 2005

Online video advertising set to soar

Online video advertising is on track to become a $1.5 billion business by the end of the decade, an increase of 567% in just four years.

By CBR Staff Writer

Internet video advertising spending in the US will nearly triple to $640 million in 2007 from this year’s $225 million, according to a new Online Video Advertising report from eMarketer.

According to the report, the success of Internet video lies in its potential to blend several marketing elements: paid search, branded entertainment, viral marketing, consumer-generated media, behavioral targeting, Web site brand marketing and online gaming.

The other key enabler is that adoption of broadband internet access in the home. According to eMarketer, there will be more than 69 million US broadband households by 2008, more than doubling 2004’s figure of 34.3 million and providing advertisers with a new online ‘mass’ audience.

Online video advertising used to be an oxymoron – but no more, says David Hallerman, senior analyst at eMarketer and author of the report. Television and the Internet are developing new ways to complement each other. Video represents common ground for television and the Internet, not a field of battle. Winner-take-all is not the name of the game.

All this is very good news for advertising agencies, he added. Now the products they are best at creating – film and video commercials, or ‘spots’ – can be transferred to a new medium, new markets.

In real-world terms, what that means is marketing campaigns can extend TV’s reach to the online space, enticing the target audience to spend more time with a particular brand. It also means using the Internet’s ability to track consumers in ways that match up television commercials with online (and offline) activity. And it means combining the content offered on the tube with the control individuals take for granted on the Internet.

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