Not that long ago, online video was sort of a toy, a somewhat geeky, somewhat mainstream add-on to the real business of the Internet: reading information.
Then came YouTube. And now here come the pros.
According to MAGNA Global, a research division of the Interpublic Group, online video ad spending in the US will pass the $1 billion mark in 2011.
MAGNA estimates that the market for online video ads will reach $699 million this year, a 32% increase over the $530 million spent on online video in 2008.
A MAGNA spokesperson asserted that interest in the online video ad space was being driven not merely by the increase of broadband connectivity, but also by the growth of professionally produced video content.
A migration of viewership is occurring online from the user-generated content that “accounted for a significant volume of potential advertising inventory in the past,” to professionally produced online video, which grew in terms of time spent by 24% in 2008, after a 50% increase in 2007.
“Over the next few years, we expect traditional TV content, and traditional TV suppliers, to account for the bulk of online video budgets,” Brian Wieser of MAGNA told Dow Jones Newswires.
It should be noted, however, that while the new MAGNA forecast calls for a 32% gain in online video ad spending in 2009—to roughly $700 million—in July 2008 the firm forecast 45% growth this year to $800 million. But, as reported by Adweek, “As with many projections made last summer, the subsequent escalation of the recession has put a damper on budgets.”
Growth in the category is still robust—and taking some surprising turns.
According to tracking figures from comScore, in March 2009, Google sites once again ranked as the top US video property with 5.9 billion videos viewed and a 40.9% online video market share. YouTube.com accounted for the bulk of that viewing, with more than 99% of all videos viewed at the property.
Fox Interactive Media ranked a distant second with 437 million videos viewed, 3%, but—and here’s the surprise, confirming Mr. Wieser’s contention—for the first time Hulu cracked the top three, moving past Yahoo! and Microsoft sites, with 380 million videos viewed for 2.6% of the total.
comScore reported that Hulu’s total video streams grew 14.3% in March, and the number of unique viewers was up 19.7% in the same period. But, in an odd jiggle of the figures, the amount of time users spent on Hulu dropped—about 10% from February.
Nevertheless, Hulu still accounted for 4.9% of all minutes spent watching online video in March, and the average viewing time per user was almost an hour: 57.9 minutes.
Overall, the average US online video viewer watched 327 minutes of video in March, nearly 5.5 hours.
Update: More Shaking Late last week, The Walt Disney Co. announced it had reached a deal to buy nearly a 30% stake in Hulu. Disney plans to run full episodes of ABC TV shows on the site, joining the lineup of NBC and FOX television shows currently available.