Internet Video Advertising Spending in the US Will Nearly Triple to $640 million by 2007

eMarketer: Broadband adoption at home is a key driver of online video advertising's growth.

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 report from eMarketer. By the end of the decade, advertisers will spend at least $1.5 billion on video ads online.

Online video advertising used to be an oxymoron – but no more. Television and the Internet are developing new ways to complement each other.Internet video has the greatest potential to blend several hot marketing elements: paid search, branded entertainment, viral marketing, consumer generated media, behavioral targeting, Web site brand marketing and online gaming. Video represents common ground for television and the Internet, not a field of battle. Winner-take-all is not the name of the game. Broadband adoption at home is a key driver of online video advertising's growth. There will be more than 69 million US broadband households by 2008, more than doubling 2004's figure of 34.3 million.

Today, more than half of US online households connect via high-speed access, and by 2008, eMarketer says, more than half of total US households will be on broadband Internet access. This essentially provides advertisers with a new online 'mass' audience. All this is very good news for advertising agencies. 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. t 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."

Online Video Advertising Publ 20051129