For 2007 alone, we are going through the highest level of growth year-over-year for online video ad spending than we may see again. Growth is expected to increase by just under 90 percent to reach $775 million in the U.S.
The other good news is growth will continue to either above or around 40 percent through 2011. At that point online video ad spending is expected to reach $4.3 billion.
For online video viewing itself, by 2008 it is projected to be watched by 53.3 percent of the U.S. population. When the end of 2011 comes around, a hefty 61.2 percent of all Americans will have watched Web video.
Citing an eMarketer report, Marketingcharts.com talks about the two main problems facing monetizing video: “One is the uncertainty about what the audience will accept, with questions about where in the content the ad will run and how long it will run for. The other is the difficulty gathering together enough video ad inventory, with questions about ad placement and how to monetize the billions of user-generated video streams.”
We talked about the first part of the problem recently, which basically comes down to just starting to experiment. Many companies have been paralyzed over the fear of upsetting their customers. Most of that has yet to be proven. There haven't been enough different tries to even know how that will impact consumers.
It think the second part of the concerns may not even be relevant. I'm not sure monetizing user-generated video is worth the pursuit in most cases. Much of that eliminates itself just from the content being offered. Of course we probably don't even have a working definition of what user-generated video even is at this time. We'll probably see what I call semi-professional video become a useful part of the ad equation in the future. But the grainy, worthless user-generated stuff probably isn't worth pursuing, so it can be dropped from being concerned about.
The proliferation of online video is only just beginning, it's not going to slow down any time soon in the future. Marketers are at this time sitting around looking at the potential but have in many ways been frozen into inaction. It's past time to begin action in this area.
The eMarketer report says that even by 2011 this is still going to be a problem, as far as the audience viewing online video versus the ad inventory available. This offers companies willing to take some risks, move fast and try many different ways of monetizing video to move ahead of the pack.
I've been hitting on this hyped up coddling of people who allegedly are going to run away from marketers and content creators who offer online video advertising. As we've talked about: that hasn't been proven. People are taking surveys and studies that ask people if they want to watch commercials. Of course everyone is going to say no. It's built into our natures to do that.
We need to throw that idea out and just start to try stuff. People really don't know if they mind it until they see and try it. The key is to not listen to what people say, but rather track what they do. Metrics will tell us the true story of if they continue on watching video through commercials or ads.
We'll never know that story until we put out ad material that we then measure.
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