Video to Drive "Significant" Growth in 2005 Online Ad Market

As many as 70 percent of advertisers and agencies plan to increase online ad spending in 2005, with a specific interest in ramping up their use of online video, according to an informal survey conducted by Unicast, an online video ad vendor.

The findings are based on a year-end survey Unicast conducted with a small sample of agency and advertiser customers. It found within the next 12 months, 88 percent of respondents believe online video will become as important as other online tools like Flash and search in their online campaigns. The remaining 12 percent expect it to become “more important” than other online vehicles.

The 70 percent of respondents planning to increase their online advertising budgets next year plan to do so by an average of almost 50 percent.

“This is a verification of advertiser and agency interest in video on the Internet as being strong enough to compel them to reallocate and reconsider their annual budgets to a larger proportion next year,” said Unicast SVP Allie Savarino.

While bullish online video’s future as an advertising tool next year, survey participants identified areas that still need improvement, including reliable metrics on the efficacy of online video to reach potential customers, and the ability to optimize online video advertising performance.

Portals Yahoo and MSN have recently aggressively promoted video and other rich media ad options.