Magna Scales Back Online Video Ad Forecast
28 april 2009 | 17:23
Growth will still be 32 percent, down from initial 45 percent projection
Magna has scaled back its forecast for online video advertising in the U.S. market for 2009, the Interpublic unit said today.
The new forecast calls for a 32 percent gain in the sector to $700 million. Last July, the firm had called for 45 percent growth to $800 million this year.
But as with many projections made last summer, the subsequent escalation of the recession has put a damper on budgets, the shop noted.
Still, growth in the category is relatively robust and Magna said, "These gains will likely outpace growth rates for other emerging media platforms."
For the following two years, Magna sees continued spending gains in the online video sector, albeit at decelerating rates of growth. Next year, the total U.S. online video ad spend will reach $865 million, up 24 percent. In 2011, Magna predicts spending in the category will cross the $1 billion threshold to $1.010 billion, up 17 percent.
The shop also said that over the next few years traditional TV content suppliers would continue to be the main recipients of online video ad dollars given that the content of those suppliers attracts the most online viewing.
But as user-generated content sites increasingly supply professional content to their mass audiences, these sites will produce faster rates of growth, Magna predicts. And ad networks will "continue to serve a valuable niche to the ecosystem, aggregating otherwise unsold inventory in an efficient manner," the shop said.
Traditional print publishers, Magna believes, "will continue to hold valuable inventory, but few of them will produce significant volumes of content to capture much market share."