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Local Online Video Ads, Dollars

Small businesses find it easier to reach viewers.

Local online video ad revenues will hit $1.5 billion by 2012, up from $11 million in 2007, according to The Kelsey Group's "US Local Video Forecast (2007-2012)" report.

"Publisher sales channels put Internet Yellow Pages in the strongest position to benefit from SMB [small and medium-sized businesses] and user demand for local online video," said Matt Booth, senior vice president at The Kelsey Group, in a statement.

Borrell Associates figures released in April 2008 were even more bullish on local online video advertising, indicating that spending would reach $1.2 billion this year.

eMarketer senior analyst David Hallerman said that service providers were making it easier for smaller businesses to create video commercials and place them on local media. He also said that local media such as TV stations and newspapers were offering more online video content to support such local advertising.

"Up to now, the traditional publishing platform for local online video advertising growth has come more from newspaper sites than TV station sites," Mr. Hallerman noted. "However, as TV stations built up their Websites, their ability to cross-sell video ads to SMBs on both media will likely give them an advantage."

Online video ad spending is growing in part from the large number of Internet users who now watch videos online—an audience eMarketer predicts will grow to 190 million in 2012.

More than six out of 10 consumers surveyed by The Kelsey Group in March 2008 said they had seen an online video ad.

The eMarketer Online Video Marketing report will be published next month. Click here to be notified when it is released.

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