Magna Forecast: Video Ads to Climb 32% in 2009

A forecast from Magna puts video ad spending on a strong growth trajectory this year, in part because of the increased availability of premium content and a continuing jump in broadband penetration.

The division of IPG’s Mediabrands forecasts an increase of 32% in online video ad spending this year, with a compounded annual growth rate of 36% over the next three years, reports ClickZ.

The forecast predicts that revenues from video advertising will jump from $531 million in 2008 to $699 million in 2009, with spending surpassing $1 billion by 2011. Growth will be fueled by traditional TV players.

The forecast is a revision downward from last summer’s prediction of 45% growth in online video ad spending for the year, notes the Wall Street Journal.

Premium video content will increase, but will remain relatively limited, particularly compared to non-professionally produced video. Few large advertisers can be successful at reaching broad groups of consumers via a video-only campaign if there are any content preferences involved, according to the report.

Zenith Optimedia recently predicted that online video and rich media ad spending would grow 29.8% in 2009. Other new formats, such as internet radio (up 29.7%) and podcasts (up 11.9%) are also expected to grow. Online ad spending overall will grow 8.6% in 2009, according to Zenith.

On average, Americans who use a PC or laptop to view video spend 1.5 hours per day doing so. Despite less-than-abundant professional video choices, US consumers watch 2.5 times as much professional video content as they do user-generated video content on their PC or laptop, according to Cisco’s Visual Networking Index Pulse survey.