NEW YORK (Aug. 14, 2008)—eMarketer has revised its online video ad spending projections, forecasting that advertisers will spend $505 million online this year in the US. That estimate is due to changes in methodology, based on historical data from the Interactive Advertising Bureau (IAB), eMarketer’s benchmark source. While this year’s online video ad projection is quite a drop from the one eMarketer put out in February 2008, which said that advertisers would spend $1.4 billion in 2008, it is important to note that the lowered estimate still represents an increase of 55.9% over 2007 spending.

US online video ad spending is expected to grab only 2% of total Internet ad spending and 0.7% of TV ad spending in 2008.

eMarketer projects that nearly 67% of US Internet users will view online video ads at least once a month in 2008. A great indicator that online video will reach a mainstream audience is the 129.5 million people who will watch online video ads in 2008. By 2013, an estimated 183 million people in the US will watch online videos, a mere 4.9% change compared with the prior year.

The majority of video consumed online today is clips rather full-length TV episodes or movies. The most popular online video content, watched by more than 40% of the US online video audience, is clips of 5 minutes or less. They consist of news, jokes, movie trailers, music videos and TV shows.

“Even as video becomes the great growth area for Internet advertising, there’s a major disconnect between the amount of time people spend with short-form video, especially user-generated, and the ad dollars that accompany such video content,” says eMarketer senior analyst David Hallerman. “However, as media companies change their business model, putting more and more professionally created video content online, the audience—and related ad dollars—will increase dramatically.”

To speak to Mr. Hallerman about his ongoing analysis of the online market, reach out to the eMarketer media contacts listed below.

About eMarketer
eMarketer is "The First Place to Look" for research and analysis on digital marketing and media. eMarketer aggregates and analyzes research from over 3,000 sources, and brings it together in analyst reports, daily articles and the most comprehensive database of online marketing statistics in the world.

Media Contacts:
Kris Oser
Director of strategic communications, eMarketer
Tel. 212-763-6033
OR
Samson Adepoju
Communications coordinator, eMarketer
Tel. 212-763-6044  

Get more articles like this one delivered every day. Click here for the eMarketer Daily newsletter.