Jupiter says that despite the popularity of web video, web video advertising will not account for much in the near term. I find this hard to believe given the explosive growth of this area of the web.
With video becoming a feature on so many web sites, one would think that video advertising would skyrocket over the next five years.
But it’s not expected to, according to JupiterResearch in its latest forecast. While the amount spent on video advertising is expected to grow at 27 percent per year on average between 2006 and 2011, that’s far shy of some of the heady growth rates internet advertising has experienced.
What’s more, even by the end of the forecast period, video advertising will still be the smallest component of display internet advertising.
Between Myspace, YouTube, iTunes, and everyone else out there trying to exploit short form (and longer!) video, the ad model seems to be a given. And since advertisers in other media already have video spots ready to go, it seems relatively easy to cut a 10-15 second spot for use online. I suspect that once a painless and broad-based method of getting a web commercial up there appears - think Google's paid search system, but across video sites - it will be easy to do and the advertisers will follow. Plus, the young demographic watching web video is highly desirable, which will add to the growth.
That said, it isn't surprising at all that it would remain the smallest component of web advertising - so much of ad revenue is driven by textual activities, like search and email...
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