LiveRail, the video ad platform, has released its most recent snapshot of the state of online video advertising. On a decidedly small base—$371 million in 2007—online video advertising has grown along with the recent explosive growth of online television, even as monetization of user-generated video makes sputtering attempts to catch up.

Some interesting stats from this report:

• Although online video advertising growth is slowing, it’s still at a healthy double-digit tick: a projected 67% in 2008 vs 73% in 2007
• As a share of total online ad spend, video is still small, but growing: 1.75% (2007), 2.36% (2008), increasing to a projected 3.86% by 2010, when spend will clear $1.4 billion
• In-stream advertising (pre-/mid-/post-roll) constitutes 88% of online advertising
• Only 21% of online video streams are being monetized
• The estimated eCPM value of all 153 billion video streams projected for 2008 in the US is $4.05. Monetized video streams will have achieved an average eCPM of $19.33.

The study also points to marginally better monetization of overlay ads (like those used in YouTube, for instance) over in-stream ads ($18.40 vs $15.80; 16% better).

Why are only 1 in 5 streamed videos monetized at all? The report points to the fact that YouTube, easily the largest video streamer online, monetizes a scant 3% of its inventory. Advertiser interest in spending on UGC is low, and lowest for UGV (as a Collective Media study showed: ad performance on social network sites).

Interestingly, the heavily-promoted 2008 Olympics video stream generated less than $6 million for NBC, a drop in the $1 billion bucket the network is estimated to have generated through advertising. Why? A suspected reluctance to NBC to promote its video stream for fear of cannibalization of television viewership, and its usage of Microsoft Silverlight, not Adobe Flash, as its video delivery platform.

Full report.

This entry was posted on Thursday, September 4th, 2008 at 3:33 pm and is filed under Online Advertising. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.