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05.19.2008
Originally featured on BroadcastEngineering.com
Newspapers captured 26 percent of online video advertising last year

Newspapers — embracing the rapid expansion of online video — are challenging television stations as advertisers rapidly move online. Last year, newspapers captured 26 percent of local online video advertising revenue, said Borrell Associates.

In February 2008, Internet users viewed 10 billion videos, a 66 percent increase over February 2007, according to comScore, a Web measurement firm. Almost one-third of those views came from YouTube alone.

Meanwhile, local online video advertising was a $400 million business in 2007, according to Borrell. eMarketer expects that online video ads will pull in $1.3 billion nationally this year.

While still a small percentage of total and local online advertising, online video represents an enormous opportunity for newspapers to grow revenue and audience. Borrell estimates that online video advertising will grow from less than 5 percent of local online revenue in 2007 to 28 percent in 2012.

The Newspaper Association of America has produced a new report, “Zooming In on Online Video: A Development & Growth Guide for Newspaper Web Sites,” which is intended to help newspapers develop profitable video applications.

“The cost of entry to create quality video continues to decline while the success of online video continues to grow,” the association said. “As competition heats up for online video mindshare, newspapers have an excellent opportunity to leverage their skills and content and capture an even large share of online advertising spending.”

The association said that while local TV stations are beginning to wake up to the opportunities, online video represents an enormous opportunity for newspapers to grow their revenue and audience share.

A 2007 Pew Internet & American Life Project study found that 57 percent of online video users (67 percent of 18-29 year-olds) send video links to others and 75 percent receive video links. The good news for newspapers is that “news” is the most popular video category, according to Pew. Sports, political and educational also garner great interest among online video viewers.

The newspaper association cited several advantages to newspapers in the race online. Those include newspaper reporters’ comfort in front of the camera due to earlier TV partnerships, high newspaper editorial skills, lower barriers to high-quality video, and growth in the field of video service providers.

Video represents a new opportunity for newspapers to compete with other “branding” media and extend their portfolio of ad vehicles that impact consumers at every step of the purchase funnel. While the prospect for newspapers to use online video to steal share from TV, at this stage online ad dollars appear to be coming from marketers’ Web, not TV, budget. That will soon change.


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