Financial Woes Increase Online Video Use, eMarketer Admits it’s Still ‘Gonna Be Huge’

EMarketer made quite a few interesting predictions in the beginning of this year, such as "Networking goes beyond MySpace and Facebook" (yes), "Beijing Olympics pumps up ad spending" (obvi) and "YouTube decides the election" – well, maybe not YouTube flying solo but definitely all of rich & social media.

Here’s another one, though: VIDEO SURGE SLOWS. (Sounds New York Post-worthy?)

"The surge in online video growth is expected to slow in 2008 with a 74
percent growth (down from 89 percent in 2007) and a spending increase
of $1.35 billion. In 2008, the array of video available online will jump dramatically,
both from professional content producers – such as TV networks – and
from of amateurs churning out user-generated content."

But wait, there’s more:

Online video players such as Google, Microsoft and the TV networks will
fortify their video offerings by buying small, ad-related companies. However, ad dollars on video will remain small relative to the total US online ad spending."

Take that, Brightroll, VideoEgg, and yes, YouTube. But wait, are they right? Has video ad spend slowed?

The revised forecast, via ClickZ: Online video ad spending will hit $5.8 billion by 2013, up from $505 million right now. That’s a jump in share from 2 percent of total online advertising to 10 percent. But the report warned that CPMs may drop in the coming years due to 1) the novelty wearing off 2) lack of scarcity and 3) web users are less inclined to watch video ads than TV viewers.

But, as Lost Remote points out, that last point "makes little sense." Yes, the commercial load is lighter, but in the long run, this results in higher ad recall and high CPM – though with increased inventory the rates should drop down again.

And here’s something to chew on: The Financial Crisis is giving online viewership some incredible boosts. See this WSJ article on the growth of streaming video. Everyone’s doing it. They can’t not.

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