Over the past couple of years, online video has been the focus of a considerable amount of research. That research generally falls into two classifications: dollars and usage. The "dollars" type focuses on revenue, usually along the lines of what percentage of marketer spend goes to online video now and in the future. The "usage" group typically focuses on user interaction. Both are important pieces of the puzzle as the medium grows into its own. This month, eMarketer released an important report focused on the dollars category. We'll review it in this edition of the Insider.
EMarketer is generally the go-to source when it comes to tracking ad spending. Its most recent report, The Online Video Advertising Picture Clears Up, includes updated projections for the video space.
According to the report, EMarketer sees online video as 4.3% of online ad spending in 2009 and only 1.3% of TV ad spend, growing to 11% and 5.5% respectively, by 2013. While that might not sound like much, that growth represents 30% to 40% growth per annum. Ask any media company investor or CEO -- that is a very healthy growth rate for a non-bubble environment.
The second interesting statistic from the report is a metric that is seldom measured: ad spending per hour viewed. EMarketer predicts that in 2009 TV will generate 13 cents per hour viewed, vs. online video's 17 cents per hour. Again, that does not sound like much of a difference, but on a percentage basis, it's significantly higher.
What does this study tell us?
The clear message is that online video has a long way to go. Even at a high growth rate, unless there is a game-changer around the corner (and game-changers generally don't give you much notice -- that's why they are called game-changers), TV will dominate for some time. And that's a healthy thing ; chasing down Goliath only makes David work harder. And David is doing a good job in messaging the advertisers of the value of the medium in the meantime.