6% of Internet Ads are Online Videos

May 7, 2012

The Internet is quickly outpacing advertising growth of other media, reaping $31.7 billion in ad revenue in 2011. In terms of market share, ad revenue for online is now solidly sandwiched between cable TV ($30 billion) and broadcast ($38.5 billion).

While search continues to dominate online ad dollars, accounting for 46.5 percent of online revenues last year, display-related advertising -- which includes banner ads, rich media, sponsorship and digital video -- is steadily growing. The medium now accounts for 34.8 percent of online revenues, up 15 percent from the previous year, totaling $11.1 billion, according to the IAB Internet Advertising Revenue Report conducted by PricewaterhouseCoopers. 

Where does video advertising stand? 
 
In the fourth quarter, digital video accounted for 6 percent of ad formats, an increase from the year-prior period at 5 percent. Mobile is another area experiencing explosive growth. At $1.6 billion, the medium broke through the $1 billion marker after a 149 percent increase from the previous year when revenue totaled $641 million.
 
"Pushing past the $30 billion barrier, the interactive advertising industry confirms its central place in media," said Randall Rothenberg, president and CEO of IAB. "Across search, display, digital video, digital provides a wealth of opportunity for brands and consumers."
 
Separately, a report by Magnaglobal forecasts online ad revenue to increase 4 percent in 2012. Of that, U.S. online video ad dollars are expected to grow 24 percent to $2.2 billion. 
 
Bottom line: If marketers are still wary about the medium, it’s time to get on board. Online video ads reach more than half of Americans, are increasingly trusted by viewers and help increase brand awareness.

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