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Future looks bright for video ads

Runt of the advertising litter to grow up fast

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The revolution will be televised but you'll have to sit through the ads first.

In the new Simpsons movie, President Arnold Schwarzenegger declares that he "was elected to lead not to read", and now advertisers are trying to ensure literacy is not a pre-requisite for consumers they target oonline.

Video advertising is set to make a significant impact on the online advertising market in the coming years, but the outlets for Irish advertisers at present are limited.

"There is a huge demand amongst advertisers, but so far the only website in Ireland selling advertising in video content to a significant degree is RTE.ie," said David Murphy, chief operating officer of Sales Online, an online advertising company.

This lack of resellers of video content is a stumbling block for potential advertisers. While many media organisations sell text content, such as news stories, for use on other websites, there is quite a large gap in the video market.

"There aren't really any individual companies producing video content to resell into websites," said Murphy. "The video opportunities aren't out there at present."

He went on to say though that the wider availability of broadband was making more companies look at video-based ads as an option, and it was likely to encourage more organisations to develop video content. The few existing providers of video-based content, such as RTE, may also look to expand their current offerings by enticing advertisers with content that is only available via the web.

Video advertising: small fry in a big pond

So while online advertising is a phenomenon of sorts in terms of its growth, at present, video is far and away the runt of the online advertising litter.

"Out of all the money spent, search-based advertising, such as Google ads, accounts for 49 per cent of the market, display and banner ads have 30 per cent of the market, while most of the rest is covered by classified ads," said Murphy.

"Video has less than one per cent f the market. It's a low base but it will grow substantially in the near future," he predicted.

Murphy's belief in the potential of online video advertising is backed up by a study carried out by research firm eMarketer, which estimates that the video segment of the US online advertising market will be worth $775m this year, up from $410m in 2006 and $55m in 2002.

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