Skip to main content

IAB counts online video's digital pennies

And now for a brief reality check:

Last week we found out how little time youngsters are spending with online video when compared to television (five minutes compared with three and half hours). This week: how few advertising dollars are spent on digital video.Of the $23 billion spent on internet advertising in 2008, a mere $734 million is spent on digital video. Divide that figure by Hulu,, YouTube,, Veoh and you get the idea.

The Internet Advertising Bureau reported yesterday that digital video ad spend has doubled since last year, up from $324 million. While that’s a stunning growth rate given that long form online video business really only launched in early 2006 with, the figure offers some much needed perspective about the potential rewards even for the most successful players.

We don’t doubt that online video is, now, what the cable industry was back in the eighties, but its easy to see why advertisers might stick with the tried and tested media and why major cable programmers such as Discovery have largely resisted taking part until a more viable business model is in place.

Given the poor economy, it will be surprising if advertisers spend much more on digital video this year or next. As ad prognosticators at Group M suggest, there won’t be the rebound everyone’s expecting because marketers will be doing next year’s budgets in the throes of a recession.