ONLINE: Video Ad Spending Projected at $699 Million

NEW YORK: Spending on video advertising is expected to increase 32 percent this year, and reach $699 million, according to the Television Bureau of Advertising. The same category is projected to break the $1 billion mark by 2011, the TVB’s latest Internet ad revenue report says, and it’s already beating TV in terms of ad dollars generated per hour of viewing. Online video generates 17 cents per hour (per user); TV, 13 cents (per viewer).

Despite the hefty dollar figure, video ad revenue will account for only 4.3 percent of total Internet ad revenues, the report said. The proportion is growing however, up from 2 percent in 2008, when the category generated $587 million. By comparison, search-related revenues generated $10.7 billion that year; display ads, $4.6 billion.

The video category is expected to grow as it expands online, and because rates are typically higher than for display ads. The TVB report said the average video CPM (cost per thousand) is around $42, compared to $15 for display ads.
-- Deborah D. McAdams

More from TVB on ONLINE video:
August 3, 2009: “ONLINE: Video Viewing Doubled Among Adults Since 2006”
The proportion of adults who watch and share video online has doubled since 2006, according to a survey by the Pew Research Center’s Internet & American Life Project. As of April, 62 percent of adults polled said they’d watched video online, compared to 33 percent in 2006.

June 5, 2009: “ONLINE: April Logs Record Number of Video Views”
April yielded a record number of online video views according to data from ComScore. Internet users viewed 16.8 billion online videos during the month, about 16 percent more than in March. ComScore pinned the rise on increased YouTube traffic.

May 1, 2009: “ONLINE: Web Video Ad Broker Gets $12 Million C Series”
FreeWheel, a company that brokers revenue-shares in the online video arena, closed $12 million in Series C venture capital funding this week. The round led by Foundation Capital and existing investor Battery Ventures. Ashmeet Sidana of Foundation Capital joins FreeWheel’s board of directors with this round.