2012: New Multimedia Spend Rises To $12.6 Billion

by Erik Sass, Feb 19, 2008, 9:00 AM

• Comment
• Recommend
• Tweet
• 

Parks Associates predicts that spending on "new multimedia" platforms will rise to $12.6 billion over the next five years. That includes broadband multimedia advertising--projected to be over $6 billion of the total--and embedded video advertising, which will account for just over three-quarters of that figure. Mobile news and entertainment will get $5 billion, dominated by display and search. Meanwhile, non-linear TV services--like video-on-demand and digital video recorders--will generate just under $1 billion in revenue, with interactive ad spots leading the way.

In the report, titled "New Advertising Platforms and Technologies," senior analyst and author Harry Wang says the key selling points of new multimedia are the ability to target the audience and the accountability provided by digital measurement.

Indeed, all the penetration figures and consumer polls are pointing in the right direction. For example, DVR penetration rose from 18% to 40% between the fourth quarter of 2006 and the third quarter of 2007. In 2007, 50% of households watched short videos online. And 64% of consumers say they would watch ads in exchange for free mobile Internet service.

On the corporate side, consolidations and acquisitions by big online players like Google, Microsoft, AOL and Yahoo mean they can offer larger advertising scale, a greater variety of digital platforms, and more cross-platform integration opportunities.

Wang also notes the expansion of companies that serve ads online, including networks, and the growing popularity of precise tools like behavioral targeting.

The report was released close on the heels of the strike by the Writers Guild of America, finally resolved last week. Noting that the dispute basically centered on dividing the spoils from these new ad revenue streams, Wang warned that in the future "there must be interest alignment among major stakeholders to avoid frictions like the Writers Guild strike that hinder content flow to these new platforms."

Although it does not address the issue at length, the Parks report seems to imply that growth will continue mostly unaffected by any economic slowdown. Other observers say digital media could even profit from a slowdown, as their targetability and measurability make them even more attractive to advertisers that are tightening their belts.

• Comment
• Recommend
• Tweet
• 

Be the first to comment on "2012: New Multimedia Spend Rises To $12.6 Billion "

Leave a Comment