Online advertising on the rise

Article from The AGE
by JULIAN LEE March 5, 2010

Advertising around online videos could eat up as much as a third of TV budgets within the next five years, online publishers and leading media buyers claim as the definition of what constitutes screen-based advertising undergoes rapid change.

The body representing the major online publishers said this week that by 2015 advertising around online video clips or longer-form content could be worth $1 billion - a huge leap from the estimated $35 million it is worth today.

Paul Fisher, chief executive of the Interactive Advertising Bureau, based his estimates on his projection that online advertising will be a $3.5 billion industry by 2014, with a third devoted to display.

Ads placed around video clips and on mobiles are expected to drive the growth in display ads, he said.

''I admit there isn't any science in it ? but I think it's a very real scenario that about a third will be for video,'' Mr Fisher said, adding that most, if not all, would be from TV budgets.

Mr Fisher's comments prompted a sharp rebuke from the Nine Network sales and marketing director, Peter Wiltshire, who said that to portray TV as ''the victim'' was inaccurate as marketers were increasingly using both mediums together.

Comparisons between flat-screen TVs and online video footage viewed on a PC could not be made, he added.

''They are very different experiences. To compare a high-quality experience on a flat-screen TV with that of online TV on a PC is wrong.''

But two leading media buyers have backed some or all of Mr Fisher's predictions.

Gary Hardwick, managing partner of Ikon Communications, said that his agency was already moving clients' budgets from TV to online video, adding that allowing marketers to know who watched their ads and for how long, gave online video a ''robustness'' that TV lacked.

Mr Hardwick said that if online videos, ads on mobile phones and clips or shows streamed from the internet on TV screens were ''bundled together then that figure sounds entirely possible''.

The managing partner of OMD, Leigh Terry, said: ''I don't think TV will be the only victim but it will be a significant one.''

He said as the definitions of audio visual advertising blurred clients inevitably would be forced to choose between one medium and another.

''If the NBN [National Broadband Network] comes about then online video, IPTV and TV ads will all be seen as one,'' said Mr Terry, who predicts the market for online video would be $119 million by the end of 2013 when PricewaterhouseCoopers predicts the free-to-air TV ad market would have grown by 5.7 per cent to $3.2 billion.

Nine's Mr Wiltshire said it was simplistic to see a win for one medium as a loss for another, especially when screen-based media fragments into mobile phones, computers, iPads and TV sets. ''We [Nine and its internet partner ninemsn] are already operating in a multi-platform environment,'' he said.

Article link here.

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