Online advertising outlook looks brighter

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Publishers will be pleased with the latest data showing strong growth in Q1 online advertising. The Internet Advertising Bureau and PricewaterhouseCoopers yesterday released new figures that peg Q1 revenues for online advertising at $5.9 billion (chart), which the IAB called “the highest first-quarter level ever for the industry.”  (Note to IAB: You might want to fix the “2009” date on the press release.)

A rebound was expected after the doldrums of the past two years, but spending appears to be picking up faster than some had predicted. The IAB/PWC figures led eMarketer to revise its 2010 forecasts for online ad spend. According to DM News, eMarketer now expects online ad spending in the U.S. will pass $25 billion for the year, a 10.8% growth rate from 2009. The research firm had previously predicted that online ad spend would reach $23.6 billion.

Where’s the money going? comScore this week released new figures showing that U.S. Internet users received an astounding 1.1 trillion display ad impressions in the first quarter, a 15 percent increase from Q1 2009. Total revenues for these display ads (excluding video ads) reached $2.7 billion for an average CPM of $2.48.

Video is likely another recipient of increasing ad spend, as media companies dramatically increase their use of online video. A new report from Brightcove and TubeMogul (pdf) estimates that magazine publishers streamed more than 190 million videos in the first quarter, a 90 percent increase over the same period last year. In terms of video “player loads” – which Brightcove defines as “the graphics, data and other components rendered on a webpage in order to view a video stream and monetize the content” – newspaper sites had more than 2 billion video player loads (up 37 percent over last year’s Q1), while magazine sites topped 1.2 billion player loads (up more than 70 percent from Q1 2009).

Increased video usage could pull more advertising dollars into the mix. The Brightcove/TubeMogul report says that more than half of the media companies it surveyed plan to roll out ad-supported mobile video in the next 6-12 months, and nearly 50 percent said they plan to add sponsorship programs to online video this year.

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