Local ad money has been traveling from TV stations to newspaper websites, as streaming video gives those local businesses the chance to shine online.
In the greater scheme of a $280 billion US advertising industry, the millions being tossed around for video ads don’t weigh heavily on the bottom line. For newspapers that have been getting their heads handed to them by a combination of online classifieds and search advertising, it’s an encouraging sign.
A recent report by Borrell Associates noted $81 million in spending in 2006 by local firms for video ads. Compare that to local TV broadcasters, which only grabbed $32 million of that business.
Looking forward five years, Borrell sees trends emerging for the local web advertising market. Online video, paid search, and email ads should all grow with advertisers spending generously on all three. Here’s how Borrell broke down projected spending for 2007 and 2012:
Online Video: $371 million in 2007, $5 billion in 2012
Paid Search: $1.837 billion in 2007, $5.632 billion in 2012
Email Ads: $233 million in 2007, $1.302 billion in 2012
Borrell noted the intensifying competition for local video dollars will bring newspapers and local TV stations to butt heads with each other:
The clash will focus on automotive advertisers initially, though real estate, health and employment are prime targets as well. The opportunity to deliver 15-second pre-roll ads along with a tantalizing new opportunity for local advertisers – long-form ‘infomercials’ on demand – are becoming antidotes for media companies suffering declines in their core products.
That $5 billion in online video spending in 2012 will go to sites that offer content visitors choose to see, according to Borrell.
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