With broadband internet access being somewhat ubiquitous these days, the way we use the internet is changing. Since it’s inception people have used the internet to seek out information. Today with technologies like blogging and video sharing beginning to mature, more and more people are more receptive to turning to the internet for entertainment, and not just information. With this change, and the advancing sophistication of ad-serving technology, online video advertising has seen huge growth in the past three years.
In 2004 online video advertising was a $121 million market. It is predicted that by the end of this year that the market for video ads online will have grown to $647 million/year. Companies like Google are showing their confidence in the market with their recent purchase of YouTube. The $1.7 billion deal to some was a bad idea, but Google is a company that has always looked towards the future, and they are banking on the idea that a portion of the $74 billion television advertising market will soon migrate to online ads. The three hundred percent growth in video advertising online show that Google has the right idea. Google already owns a good portion of online text advertising, it only makes sense for them to expand into video as the market for such advertising expands.
Since the industrial age began companies have sought ways to advertise their products. Television advertising, although expensive, gave them the ability to target certain markets and age groups. Video advertising online allows for even more targeted ads, and at a savings over traditional style ads.
In the past advertising via video meant huge costs. It would start with an advertising agency that came up with a concept. Then a production company made the ad, and finally to get your ad on prime time television an outlay of upwards of a few million dollars may have been required.
Advertising with online video costs less, and can be targeted to whatever demographic you want. A simple flash animation posted on the front of the latest breaking story on one of the larger news sites can generate more interest than the more expensive television ad ever could. Of course professionally produced ads can still be found online, and even ads that were originally made for television; but online video gives companies more flexibility to both budget and audience.
It is our interest in online video that is changing the way people communicate, the way we seek out information, and the way we are entertained. That huge growth in online viewing is changing the way companies advertise as well. Personally I find a small advertisement posted to the beginning of a news story, or shown between rounds of word womp on gaming sites like pogo, less intrusive and less annoying than traditional television ads. Since its humble beginnings the internet has been changing our world. Online video is just the next step, and where business sees opportunity to reach people they always tend to follow.