Online Video Starting to Sprout for Advertisers

After years of waiting, online video is starting to make a move into online advertising. This is no surprise, other than the time it took Google to finally make it available. Online video advertising has always been a natural for search and contextual advertising, given the richer and more compelling message that video can usually offer. And with the success of YouTube, and Google purchasing this website for $1.8 billion, you had to know video was coming to you, brought to you by Google.

We've been predicting it for as long as we've been in the online marketing business. We've even been on local TV (CityTV with Judy Gibbons) talking about it recently, having been asked about the impact. What they picked up on, is the same as many other pundits - that it will be great for local advertisers, especially those who would not otherwise advertise on TV, due to cost or because they were in a niche where a commercial would just not make sense.

Google is currently piloting AdSense for video so that publishers can sell ad space on their websites to run online video ads that may be of interest to their readers. Adbrite has had something in place for about a year.

According to the Kelsey Group, online video may make inroads where online ads, and even search may not, because of the familiarity that advertisers have with video ads and commercials. It is easier to sell this because it is less abstract than say something like pay per click. In addition, it plays to the vanity factor, which is important to many advertisers - whether or not the ad is even effective.

The only drawback for many will be cost and skill required to produce the ads. Besides the creative, the technology required for a professional online video ad, is beyond what most ad agencies and website designers usually have in-house. There will be line-ups to get this done at a cost commensurate to the cost of running the ad, as online marketing companies gear up for this onslaught. Of course, expect companies such as ourselves to fill that gap :-)

Bill Gates Says Future of Advertising is Online

This week, Microsoft Chairman , Bill Gates stated that he will spend the remainder of his employment at Microsoft, focused on advertising and marketing services.

Speaking at Microsoft's annual Strategic Account Summit, Bill Gates said that his main focus before he left his full-time position would be on 'search, buyers and sellers'. While that will only be about a year since he is leaving in mid-2008, his comment, 'That will be my biggest thing', is fairly telling.

'We're saying newspapers will go online, and there will be massive innovation that comes out of that,' he said 'We're saying that TV, the biggest ad market in the world, will completely go online and have the kind of targeting interaction that you only get out on the Web today.'

According to BizReport, the shift to online, with its associated lower costs and enhanced user experience will, Gates said, contribute to the shift of advertising online over the next five years and beyond.

This is important announcement in the online marketing world. First, he is predicting Microsoft's future, and the future is online advertising, particularly search. Not a small change, considering their business has been primarily Windows and Office. And secondly, he is admitting that their future is to catch up to Google.

In my opinion, this is a watershed moment - and one that may define the future of the Internet. Microsoft has $50 billion cash in the bank to make the shift.

Internet Advertising Passes $1 Billion in Canada

It sounds repetitive but it's worth noting that online advertising has grown substantially again in Canada. This time the report from the Interactive Advertising Bureau of Canada said online advertising spending totaled $1.01 billion for 2006, up a whopping 80% from 2005.

Furthermore, it's expected to grow another 32% in 2007, to $1.4 billion. IAB president Paul Gignac predicts that 'it may only take us another 2-3 years to reach the second billion'.

These findings were confirmed in a separate survey by the Institute of Communications and Advertising and Canada Post. This survey of 270 senior marketing executives reported that Internet advertising will grow at the fastest rate, which they are estimating at 25%. Traditional, albeit much larger, is growing at 5.9% according to them.

The U.S. has similar growth trajectories reporting a 23.1% increase over the same period last year from 'interactive agencies', while traditional down there is growing at 4.2%, according to Advertising Age.

The shift is not a fad, having been the case for the past 5 years, with year after year increases in interactive agency revenues and online advertising. What's more important I think is the following quote:

"Interactive is huge," says Chris Weil, chairman-CEO of Momentum Worldwide, a promotions agency owned by Interpublic Group of Cos, via AdAge.com. "If anybody in marketing is not a big part of interactive, they won't be around much longer."