Internet advertising: How high can video go?

October 6, 2009

I didn’t get a chance to look at these numbers on Internet advertising that PricewaterhouseCoopers and the Interactive Advertising Bureau released on Monday, thanks to being on a late shift and having plenty of news to shovel through thanks to Conde Nast. I glanced at them on Tuesday, however, and here’s what I seized on in the press release:

  • U.S. Internet advertising revenue in the first half of the year was $10.9 billion, down 5.3 percent from last year’s first half.
  • Search and display-related advertising continue to represent the largest percentages of overall interactive advertising spend. Search revenues amounted to more than $5.1 billion for the first six months of 2009, up slightly from that same period in 2008.
  • Display-related advertising—which includes display ads, rich media, digital video and sponsorship—totaled nearly $3.8 billion in the first six months of 2009, showing a relatively modest 1.1 percent decline from the same period in 2008. Digital video continues to experience robust growth with a 38 percent increase from the first half of 2008.
  • And this quote: “While the overall advertising market has continued to be impacted by current economic conditions, marketers are allocating more of their dollars to digital media for its accountability and because consumers are spending more of their leisure time online,” said David Silverman, PwC Assurance partner.

The video section is what caught my attention. I’m one of those people who is perpetually fascinated by the faith that people put in Internet video. Newspaper websites want to do more of it, and everyone else seems to be interested too. The idea, they say, is that video is an ever-more popular way to give people news, ads and what-have-you in a format that modern audiences want.

Maybe I’m antediluvian because I’m 36 years old, but it seems to me that pursuing video just so you can say you’re modern doesn’t seem like it’s going to meet the tastes of most of the Internet audience. Video can be distracting and time-consuming. Yet, more ad dollars are going to it. How popular is video online really? I mean, when it comes to news and ads. Am I completely wrong about this, or is video going to remain a small part of the ad revenue pie?

(Photo: Reuters)

5 comments

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

I never pay attention to any internet ad. My personal experience says, salesman will do anything to sell his product. Better rely on critics with goodwill and experience of end user of product.

Posted by FaQ | Report as abusive

I hate the animated ads and video ads that pop up on my screen while I’m surfing a website. So much for blocking pop up ads now they they’re embedded in the website. I don’t watch video ads, but I feel more and more like I’m being forced to watch them since they hide the “close” button that gets rid of the stupid ad.

Posted by K | Report as abusive

The video ads in streaming TV and movies like on Joost.com and Hulu.com are mostly far less annoying than ads on TV. Some of them even have a reasonable sound volume.

Posted by oB | Report as abusive

the days of pop ads are close to dead. especially when Mozilla is your internet. they have their own software blocking ads. The part about video ads is, i think, the future. 1> People are lazy and would rather have someone tell them the news. digital video allows news corps like reuters to stream footage or at least the top stories. So instead of the website paying to stream these videos they can just drop in an ad in. 2> also with a site like hulu or any digital video site they can drop in a 15 second promotion ad that i dont mind watching because they are shorter then most commercials and you are forced to watch them anyway to watch the video you desire. more people are turning to the internet because it is easier to get what you want in an easy to watch format. this would explain the “robust growth”.

Posted by Anounomas | Report as abusive

80% of all web users with high-speed connections watch video. YouTube is the second largest search engine on the Web, right behind Google. Every study commissioned about video shows that consumers not only like watching it, but that they also are more likely to click through to an advertiser’s website or buy an advertised product after watching a piece of promotional video content.

Posted by Andrew | Report as abusive