Video worth fraction of online ads, new report claims

Despite its popularity among advertisers and companies alike, the video advertising sector is only worth a fraction of the online advertising industry, a new study suggests.

According to research by eMarketer, internet video advertising accounts for about five per cent of the $20 billion (£10.2 billion) online advertising industry.

Yahoo! chief executive Terry Semel claimed that although online video advertising was able to attract sponsorship from several major brands "a lot of learning is starting to take place and a lot of trials are taking place".

"I see it ultimately as something that becomes very significant and it'll get there, but not quite yet."

The report claimed that a lack of content created specifically for the internet, fragmented audiences and an evolving advertising buying model were the reasons behind video attributing for a small percentage of online advertising.

According to earlier research by Screen Digest, user-generated video websites such as YouTube and MySpace will generate a fraction of online advertising as it accounts for about 15 per cent of America's total internet video advertising budget.

Back 21.02.2007.