According to The Kelsey Group’s “US Local Video Forecast (2007-2012)” report, local online video ad revenues will hit $1.5 billion by 2012, up from $11 million in 2007. Service providers are making it easier for smaller businesses to create video based commercials and place them on local media. As well, local media including TV stations and newspapers are offering more online video content to support such local advertising. The need for media players to monetize their increasing video channel consumption which has high cost implications (bandwidth, processing, etc.) is a perfect opportunity for small businesses to get in the commercial game that once was blocked by cost as the biggest barrier to entry.
Up to now, the traditional publishing platform for local online video advertising growth has come more from newspaper sites than TV station sites, however, as TV stations built up their Web sites, their ability to cross-sell video ads to SMBs on both media will likely give them an advantage.
Online video ad spending is growing in part from the large number of Internet users who now watch videos online, which eMarketer predicts will grow to 190 million in 2012. More than six out of 10 consumers surveyed by The Kelsey Group in March 2008 said they had seen an online video ad.
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