• by Gavin O'Malley , Staff Writer @mp_gavin, October 5, 2011

It's a proud day for video advertising advocates everywhere. Like a medal of honor, the Interactive Advertising Bureau is crediting the channel's rapid rise with helping to counteract a worldwide advertising slump.       

In the UK, online ad spending saw 13.5% year-over-year growth during the first half of 2011, according to new data from the IAB and PricewaterhouseCoopers.

In no uncertain terms, the IAB directly attributed the growth to a rush of consumer goods companies, from Unilever to P&G, embracing digital display advertisings, and online video in particular.

Overall, UK companies spent $3.48 billion on all forms of online advertising in the first six months of the year, according to the IAB, compared with a meager growth rate of just 1.4% across traditional media, such as TV, newspapers and radio.

What's more, the 13.5% year-over-year rise recorded in the first six months compares with 11% in the same period last year, and just 4.6% in the first half of 2009.

"Boosted by sophisticated new formats and 100% growth of online video, display advertising grew by 18.5% year on year," the IAB exclaims. "Although banners and embedded formats still dominate online display ... video doubled in size ... giving it a 9% share of online display. This is due to a significant increase in advertisers using video to deliver brand messages."

"But, video's expanding impact isn't limited to foreign lands. Stateside, the IAB and PricewaterhouseCoopers recently reported that video ads commanded double-digit growth during the first half of the year -- up 42.1% year-over-year -- and moved close to the $1 billion mark with $891 million in the half year of 2011. Partly as a result, U.S. online ad revenues rose 23.2%  -- to a record $14.9 billion -- in the first half of the year.

It should be noted, however, that digital video made up just 6% of online advertising during the first six months of the years, or $891 million, according to the IAB. By contrast, banner ads represented a 23% share, or $3.4 billion.

To put these numbers into perspective, we were able to conduct a little Q&A with Seneca Mudd, Director of Industry Initiatives for the IAB, and head of the IAB Digital Video Committee. Enjoy.

VidBlog: Is it accurate to say that video advertising is increasingly helping to bolster online advertising in general, or is its share still too small?

Mudd: Video advertising continues to energize the entire industry, but ad spend lags proportional representation to audience consumption. Consumers have clearly chosen to time- and device-shift away from telecast and into digital video. We believe marketers will see the value in meeting audiences where they are.

VidBlog: Why are marketers finally embracing online video so rapidly?

Flexible, portable, and concentrated are really the three reasons why digital video works as a messaging platform. You can place a spot anyway, you can view a spot everywhere, and the content you wrap around speaks directly to the consumer because she sought it out for viewing. Digital video also provides more ad choice than any other platform. We know viewers respond to choice whenever they have an option.

VidBlog: Was there ever any doubt that online video advertising would success?

Mudd: Not really. Digital video works because users regularly tap into streams at-home, at-workplace, and in-transit. A generation ago, the building guard or  shop clerk was sneaking a read of the tabloids during downtime, now they are scanning videos on the mobile, hoping the boss doesn't pop over their shoulder. Now that is progress.

VidBlog: What barriers stand in the way of continued online ad growth?

Mudd: At the IAB we regularly counsel leading brands to consider shifting 15% of their telecasting budget over to digital video for superior targeting depth and message impact. The medium allows the messenger to focus on communities who understand brand engagement and know how to talk back. It is the conversation sophisticated marketers want to have.  

VidBlog: What's in store for online advertising?

Mudd: Bigger, bolder, and braver on all levels.