Why Online Video Advertising Works For Business?

Why does your company engage in online video advertising, display ads or display advertising?

John Mignano

According to recent eMarketer forecast, growth in spending on online display ads will outstrip paid search through 2014…

However search continues to take the greater share of dollars. Last year search and display increased 13.9% greater than the rise in total US online ad spending.

What Works in Online Video Advertising?

Between 2011 and 2014 projections for online display spending will grow!

 In fact growth is expected to be faster than overall online spending, while search spending will lag slightly behind.

US Online Display & Search Ad Spending Growth (% Change)

Type  2009  2010  2011  2012  2013  2014
Online Display  -3.4%  13.9  10.5  14.4  10.4  
Search  1.4%  15.6  9.9  13.6  10.2  10.8
Total  4.5%  17.0  14.0  19.2  12.8  17.0

Source: eMarketer, November 2010; (Display includes banner, rich media & video; search includes paid listings, contextual links, paid inclusion & SEO)

The increase in display advertising will be driven partly by the dramatic rise predicted in online video advertising,.

This is set to grow by at least 34% every year through 2014.

Banner ads will experience more moderate gains of between 7% and 16.2% annually, while rich media spending will stagnate.

In 2010, eMarketer estimates US advertisers will spend $12.37 billion on paid search, compared with $8.88 billion on online display ads.

Search still gets most of the dollars in 2014 at $18.84 billion, display will have closed the gap and reach $15.92 billion in spending for that year.

US Online Display and Search Ad Spending (Billion Dollars)

Type  2009  2010  2011  2012  2013  2014
Online display  $7.50  8.88  10.12  12.06  13.61  
Search  10.70  12.37  13.59  15.43  17.00  18.84

Source: eMarketer, November 2010; (Display includes banner, rich media & video; search includes paid listings, contextual links, paid inclusion & SEO)

David Hallerman, eMarketer principal analyst says:

 “Much of the display ad spending gains are new dollars coming online…  part of a bigger trend towards more spending on branding, rather than spending focused on direct response alone…”

David predicts branding-oriented online advertising will increase it’s share of the US total from 36.3% this year to 41.4% by 2014 with direct response making up a smaller part of the pie.

Display’s high growth rates, and especially the dramatic growth expected in online video advertising will be the main factor behind this trend.

Why online video advertising works for business? Because high quality web video is done for you.

Online video advertising no longer has to cost an arm and a leg…you can profit from it right now!