Local Online Video Ads To More Than Double In 07

    February 14, 2007

A new report by Borrell Associates says that local online video advertising will account for $371 million this year, which is 5 percent of total online ad spending. In 2012, that amount will climb to $5 billion and will account for 35 percent of local online advertising budgets, Borrell projects in its report, “The New Frontier: Local Online Video Advertising.”

Spurring that growth is competition between online newspapers and TV stations each trying to gain traction in the others primary business. Also a factor is the relative affordability of online advertising when compared to TV advertising.

Peter Conti, senior vice president with Borrell said, "These are the people who can’t afford TV advertising," he said. "It’s that kind of video and that kind of marketing that they’ve never been able to do or afford before, and it’s affordable on a much more effective and efficient medium."

Conti also said he believes that the growth in local video would be at the expense of banners and classified listings. He thinks local advertisers will be willing to target video ads something they have not had the ability to do offline.

“Print media are using the Internet as a crossover platform to tap traditional TV advertisers, just as TV stations (and others) are trying to use the Internet to tap traditional print advertisers,” the study concluded.

The report also noted that newspapers are currently the leader over TV broadcasters when it comes to capturing local online video advertising dollars. As reported by my colleague David Utter, newspapers sold around $81 million in local online video ads in 2006 compared to TV broadcasters $32 million.

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