Advertisers will spend $1.35 billion on Web video advertising in the US in 2008, according to investment bank Bear Stearns. For perspective, that’s about 1.6% of what they’ll spend on broadcast and cable TV this year. But analyst Robert Peck thinks that will grow to 3.3% of total TV spending in 2011, or about $4.3 billion.
Why will video advertising grow? Because consumers love Web video, and they don’t seem to mind ads. The average viewer watches 2.4 videos and spend 7 minutes watching. When surveyed, more than 70% say they’re ok with the ads as long as the video is free. The flow of dollars into Web video will be spurred by added video inventory from sites like NBC.com, Fox.com, NYT.com and Hulu.
Perhaps the most interesting data point: Robert thinks YouTube will generate $90 million in U.S. advertising this year — about 7% of the total market.
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