Study: Print Beats Broadcast to Online Video Advertising

Broadcasting & Cable, 2/12/2007

Local online video advertising is shaping into a battle between traditional print and television news providers, according to a new report from Borrell Associates.

Worth about $161 million in 2006, the local online video advertising marketplace is expected to grow to $371 million, or 5% of local online advertising, this year and to balloon past $5 billion in next five years.

In 2006 the market for locally targeted online video ads quietly solidified into a legitimate market with the three largest markets ( Chicago , New York and Los Angeles ) worth more than $5 million each. The next 37 largest markets also each saw more than $1 million in revenue from online video, according to Borrell.

The growing advertising category has benefited publishers and broadcasters moving online, but initially has been embraced much more quickly by print. In 2006 newspapers sold approximately $81 million in local online video commercials in comparison to $32 million sold by TV broadcasters.

Broadcasters are expected to bounce back this year, however. Thanks to an increasing number of video streams available on TV Websites, 80% of broadcasters surveyed by Borrell expect to sell streaming video ads this year, up from 72% who did last year.

The online video advertising market is expected to increasingly revolve around the strength of Websites' video content, an area which many larger newspapers have been working hard to cultivate.

The report comes on the heels of report from the Television Bureau of Advertising that online TV revenues were up 41% in 2006.