Online Video Advertising Entering a Golden Age

It appears that online video advertising is no longer in the realm of "experimental media buys" but has fully entered the mainstream. And major profits are to be had.

According to media research firm Borrell Associates, streaming video advertising is set to grow more than 60 percent -- reaching $5.6 billion next year. And this growth is not limited to big agencies or businesses with massive budgets. According to Borrell, two of every five video ad dollars spent will come from local advertisers.

A separate report earlier this year from eMarketer predicted $1.5 billion in online video ad spend for 2010, and $5 billion by 2014 -- behind Borrell's predictions but still showing tremendous growth. While the numbers might not match up, one thing is clear -- online video advertising is hitting its stride.

Another strong indication? Hulu's CEO, Jason Kilar, told Bloomberg that ad revenue had already topped $100 million this year for the streaming video site. That's ahead of a rumored IPO for Hulu, which is hearing estimates of $2 billion or more. The last video site to garner over $1 billion was YouTube when it was purchased by Google in 2006. And we all know how that has turned out.

This is good news for every Web business. As online video consumption has risen, so has the prominence of streaming advertisements. As such, consumers have become quite accustomed to (and accepting of) these ads and more than willing to sit through 15 or 30 seconds to get the content they want. What's more, the explosion of smartphones, launch of the iPad and the pending influx of more tablet devices set to hit the market in mere months gives users even more opportunity to watch online video away from the confinements of a desktop computer. In fact, in a recent survey of 31,000 consumers conducted by Texterity and audited by BPA, of those who own iPads, a full 72 percent said they watch video on the iPad.
The takeaway here is that video is not a luxury for online businesses -- it has quickly become an integral part of the publishing and advertising landscape. Video is easy to create and distribute, and there is real opportunity to monetize on these videos. Consumers are watching video at a record pace, too -- a real opportunity to advertise your business to an active, engaged and captive audience.

Want to get involved in online video advertising? Check out BrightRoll, SpotXchange, VideoEgg and, of course, advertising on YouTube.