Online video, social driving huge gains in online advertising

Online video, social driving huge gains in online advertising

A new report from Strategy Analytics is forecasting global online ad spending will exceed $100 billion in 2013, driven primarily by spending on online video and social media.

Overall ad spend in 2012 was estimated at $462 billion, SA said, an increase of 3%. The research company said it expects spending to grow at least another 4% in 2013, and cross the $500 billion mark by 2014.

Total online spending is forecast to top $102 billion this year, an increase of 14%, and make up more than 20% of the total global ad spend.

Online video is the fastest growing segment of the market, SA said, with year-over-year increases of 38% globally. Spending in the segment has more than doubled over the past four years.

Online video ad spending in the U.S. is expected to increase 31% from 2012 to 2013, Europe could rise 35% and Central and Latin American (CALA) spending is expected to increase 55%.

“By 2018 we expect online video advertising will represent around six percent of annual spending on TV advertising,” analyst Leika Kawasaki wrote. “The longer term growth story for online video advertising is one of the most exciting in advertising. The key issue is where will the growth come from: will spending transfer from TV or will it be incremental to existing spending?”

Kawasaki said online video advertising revenues remain a fraction of TV advertising.

“The 30-second slot remains unmoved by the numerous online formats emerging and represents a single, monolithic spending format compared to the relatively fragmented state of online,” Kawasaki said.

SA said the online advertising market surpassed $30 billion in 2012, and forecast an increase to $35 billion in 2013.

The researcher said it expects dramatic growth to continue in CALA over the next five years as the market takes advantage of the 2014 World Cup and 2016 Summer Olympics.

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