Online Video Ad Spending is Up

May 5, 2009sparxoo_admin

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Photo by CJLUC on Stock.Xchng

By Ethan Lyon, Senior Writer

According to eMarketer yesterday, MAGNA Global predicts online video advertising will reach $699 million this year, a 32% increase from 2008. By 2011, MAGNA estimates US online ad spend will surpass the $1 billion mark. Why? We’ll discuss why online ad spend is up and the next evolution for online video consumption.

Why an Increase in Online Ad Spending
As companies maximize their budgets and seek real results, online advertising is practical solution. With highly measurable results, interactivity and less expensive production and distribution costs, online advertising is a natural response in recessionary times. With more professional content from companies like Hulu.com–who recently broke into the Top 3 online video properties, passing Microsoft and Yahoo! Services with 380 million views (2.9% of total online viewership)–online video is no longer just a 30 second laugh (though we all need that).

Now, our favorite shows and movies can be streamed on our computer with higher quality than ever before—making it a prime advertising hot spot. The question is, after we emerge from the recession, will we continue this online ad spend trend?

Rise in Pro-Ams
The seismic shift in online video can be attributed to many factors, including the rise in Pro-Am inclusion. Pro-Ams, as described in Demo’s Charles Leadbeater and Paul Miller’s book, The Pro-Am Revolution: How enthusiasts are changing our economy and society (2004), are amateurs who  can produce near professional content, without actually having a career in the field. They are somewhere between amateur and professional, hence the name. The rise in Pro-Am inclusion in online video can be attributed to the advancements in consumer tech, such as professional quality camera equipment, coupled with affordability and ease-of-use. Therefore, more quality content is being produced, more content is consumed.

What’s Next
Behind that online video streaming on your 13” laptop, is a 40” TV. The migration from TV entertainment to online, will be reversed as tech advancements make online streaming more user-friendly and accessible on TV. Xbox 360 users can currently stream Netflix movies and shows from their gaming console. Over one million Xbox users have downloaded and activated Netflix on their gaming consoles from when it was launched in November of last year to February 2009. According to Broadband DSL Reports, Web-to-TV content is expected to grow to 24 million by 2013. The one-stop-shop experience will converge into a single gaming console, as we will discuss more tomorrow. Find out what key ingredients that will shape the one platform device.