NEW YORK Online video is the fastest growing advertising format. But in spite of the mega-popularity of YouTube and its brethren -- and the fact that the category's growth rate is expected to reach 56 percent this year -- ad spending for the segment has been lower than marketers had hoped, according to eMarketer.
This year, brands will spend just $505 million on online video advertising, and it will take until 2010 until ad spending surpasses the $1 billion mark, eMarketer said.
Reasons for the relatively low spend boil down to one central fact: Advertisers are nervous about placing their brand messages near sophomoric or even vulgar video content, and such user-generated clips make up most of what is available online.
As television networks and other producers post more professional content online, ad spending should rise. Marketers can also be expected to invest in online standbys like video ad networks and better targeting, which deliver reliable returns on investment, according to eMarketer.