This year, $371 million will be spent on local online video advertisingâ€”comprising about 5% of the total of $7.7 billion online ad spending according to Borrell Associates Incâ€™s new study, â€œThe New Frontier: Local Online Video Advertising.â€ This is more than double last yearâ€™s online video spend total of $161 million.
Borrell predicts that by 2012, local online video will capture 35% of the online ad spend, or about $5 billion. Only paid search is predicted to fare better at $5.9 billion. (Their other two categories, e-mail ads and banners/listings, will comprise $3.4 billion together.)
The Executive Summary of their report says of those millions and billions of dollars:
Where will most of that money go? Not to the purveyors of traditional â€œword from our sponsorâ€ commercials, but to those who can offer long-form video information that their Web site visitors actually choose to see.
So, whoâ€™s going to give us the commercials that we actually want to see? Borrell adds more predictions for the future of the newspaper/TV station rivalry and the online video industry in general:
Online competition between newspapers and broadcast TV stations â€“ the leaders in local advertising â€“ will intensify this year as both sides develop Web-based video products. The clash will focus on automotive advertisers initially, though real estate, health and employment are prime targets as well. The opportunity to deliver 15-second pre-roll ads along with a tantalizing new opportunity for local advertisers – long-form â€œinfomercialsâ€ on demand â€“ are becoming antidotes for media companies suffering declines in their core products.
As if the advertising industry needed more internal competition. Luckily, we, the viewers, will reap the benefits: (I hope) creative and intriguing video ads.