BORRELL LOCAL ONLINE AD CONFERENCE

Online Video Ads Can Boost Page Value

Web-based companies stand to garner relatively big payoffs from video advertising, even while overall ad spending is still reeling from tough economic times.
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NetNewsCheck,

The rapid rise of online video advertising has the potential to reap monetary rewards for both advertisers and the websites that house them, industry experts said Tuesday.

“The page itself becomes more valuable,” said Mike Glickenhaus, CEO of VMIX, a tech company that facilitates online video use. “The time people spend on the page increases, which means that the value for the direct advertising related to the video goes up, but also the value of your page goes up.”

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Glickenhaus’s comments were part of a panel exploring the growing use of online video advertising at Borrell Associates’ Local Online Advertising Conference in New York.

Todd Minnier, senior director of digital products for The Berry Co., which produces online yellow pages, said Web-based companies stand to garner relatively big payoffs from video advertising, even while overall ad spending is still reeling from tough economic times.

Video advertising grew 42% in 2009, and is expected to grow another 40% this year, he said. That means that as much as $1.5 billion could be spent this year on video advertising alone. “You’re looking at an industry that could be $4 billion in 36 months,” he said.

Meantime, though, companies like Berry that are luring online advertisers are still trying to figure out how to best monetize the medium.

Currently, Berry produces and hosts online ads for $100 to $750 a month, with the average client paying about $350 a month for 12 months.

While about 5% of Berry’s clients -- typically small and medium-size businesses in medium to small markets -- use video advertising, Minnier said that number is expected to grow to 70%.

Until then, non-advertisers, such as news organizations, are also rapidly increasing the use of video to provide engaging content, Glickenhaus said. Newspapers in particular, he said, are using video to capture audiences by providing timely content that people want to see.

By doing so, news outlets are not only generating user traffic but advertiser interest as well, he said. “We see it picking up steam.”

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