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Local Video Advertising Expected To Take Off

Report says mind-boggling spending increases should occur

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The online video ad market is expected to grow a lot within the next few years, and according to The Kelsey Group, small and medium-sized businesses will play a big part in this expansion.  Look for their contribution to increase from around $10.9 million in 2007 to $1.5 billion in 2012.

That second number is over 137 times greater than the first, or as another way of looking at it, represents a compound annual growth rate of 167.8 percent.  If The Kelsey Group’s predictions are even close to accurate, smaller companies will be participating in a sort of video advertising stampede.

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"Reception so far has been positive, given the general appeal of video and its simplicity when compared with other forms of online advertising (e.g., pay-per-click)," noted an official statement.  "Demand for video will drive Internet Yellow Pages to execute tighter sales and fulfillment, and the medium’s favorable margins will further compel publishers to embrace it as a means to offset print revenue declines."

There’s even the possibility that The Kelsey Group’s estimate could be low.  As an eMarketer piece points out, Borrell Associates believes $1.2 billion will be spent on local online video advertising this year.  Thank (or blame) the recession if this occurs, since businesses will be pushed to try new things.

Aside from the direct results on sales, this trend could also lead to impressive profitability for YouTube and Hulu, plus another wave of video advertising advancements.

Local Video Advertising Expected To Take Off
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    Aside from the direct results on sales, this trend could also lead to impressive profitability for YouTube and Hulu, plus another wave of video advertising advancements.

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