Internet Video: Direct-to-Consumer Services, a new study by Parks Associates, a Dallas, TX research and consulting firm, projects broadband video ad spending will rise from $1.072 billion in 2006 to $4.385 billion in 2010.
“Major broadcasters, movie studios, retailers, and content aggregators are all experimenting with new ways to distribute video content online and attach advertising to their offerings,” said Kurt Scherf, vice president and principal analyst. “The early results are quite promising.”
He said the revenue is split between embedded ads and non-embedded display ads. “Most of these early advertising dollars will be generated from display ads on different video streaming Web sites. Later, as the inventory of high-quality embedded advertising increases, we’ll see that ad revenue grow to surpass the non-embedded ad dollars,” he said.
Most of the advertising is in-banner video ads and in-stream pre-rolls, but alteratives are being developed by VideoEgg, which is leveraging opt-in tickers and banners and Vidavee, which is introducing a hot mapping technology that identifies the most popular segment within a video for advertisers to insert their messages, Scherf said.
The study also focused on the revenue TV networks are generating from advertising inserted into their broadband offerings. “ABC indicates that revenues from their Internet programming could total approximately $700 million in fiscal 2007 and Scripps Networks, which operates such broadcast channels as The Food Network, HGTV, Fine Living and DIY, announced that 10 percent of its revenue is coming from online sources, most of it advertising,” Scherf said. “Online distribution has boosted viewership and advertising revenues for current prime time television offerings and serves a strong differentiator in an increasingly fragmented market.”
