eMarketer CEO Geoff Ramsey spoke about the future of online video recently at IAB MIXX. He said that in the near- and midterm, television and online video models will merge, both in content and ads. TV will get more measurement, targeting and accountability, while online video content will improve to rival TV.
One of the brightest spots will be the on-demand video model. The format, which lets consumers watch whatever they want at any time of day or night, will continue to be largely ad-supported.
Despite the rise in online video ad spending, the medium will remain small in terms of ad dollars—especially compared with the $70 billion TV market—but it will grow to over $3 billion by 2012.
David Hallerman is a senior analyst covering online video at eMarketer. Like Mr. Ramsey, he foresees changes in ad models as the online video market grows. New models for online video advertising, such as through widgets, or new/old models, such as product placement and sponsorship, will coexist with increasing use of in-stream ads (for example, preroll), which are currently associated with traditional TV content.
The greatest increases for US video ad spending will come from large brand marketers (aka, traditional) placing TV-like commercials (mostly preroll and midroll) against professional content from large media companies.
However, much of that content and associated advertising will be distributed across the Internet, not at the destination sites of each TV network.
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