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Will Video Kill The Search Advertising Star?

Posted on 6.14.2007
According to a new report from research analysts at IDC, search is about to lose its dominance of the online advertising market, to be overtaken by video and rich media ads by 2011. As U.S. marketers keep moving budgets from the traditional media onto the net, IDC forecasts that Internet advertising will grow about three times as fast as advertising overall during the forecast period. The overall revenue of Internet advertising will grow from $16.9 billion in 2006 to $31.3 billion in 2011 at a compound annual growth rate (CAGR) of 13.5%.

So does this mean that Google and Yahoo, who have made fortunes from the search market, will suffer? Don't count on it. You've already seen Google purchase YouTube, so they've already bought into the promise of video. Google also purchased DoubleClick (and Yahoo purchased RightMedia) so they've both got the measurment tools in place to make a competitive run not just at video dominance but social media markets as well.

Does this mean that you should scrap your search advertising efforts and focus on video? Don't jump ship just yet. According to the report, Search advertising will retain its number 1 position as the advertising format garnering the most ad spend. However, even though absolute spending on search advertising will continue to increase, its market share will slowly decline from 40% in 2006 to 32% in 2011 as video advertising grows.
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