Posted February 14, 2007 5:00 pm by with 3 comments

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It’s true: newspapers are outperforming TV in video ads. In 2006, newspapers’ websites sold $81 million in local online streaming video advertisements. Local TV broadcasters’ websites sold only $32 million. Even taken with the other $48 million spent on online video advertising, it’s not much compared to the advertising industry total of $280 billion. But look out: online video is poised to become a more and more significant portion of online ad spending.

This year, $371 million will be spent on local online video advertising—comprising about 5% of the total of $7.7 billion online ad spending according to Borrell Associates Inc’s new study, “The New Frontier: Local Online Video Advertising.” This is more than double last year’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 “word from our sponsor” commercials, but to those who can offer long-form video information that their Web site visitors actually choose to see.

So, who’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 – the leaders in local advertising – 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 “infomercials” on demand – 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.

  • With television getting more and more diluted, I guess I’m not surprised. Though there are many less readers of the local newspaper, television channels are having to share bandwidth with hundreds of other channels (and growing).

  • Online Newspapers? I guess so, right. It would be hard to watch a video on the LA Times.

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