Online video advertising is here to stay.  Earlier this year, analysts told marketers they could increase their reach by shifting about 15% of their TV ad budgets onlinevideo3into online video. Marketers are spending more on online video, but not all of the funding for this change is coming from the TV budget.

Marketers are on track to spend 53% more on online video in 2013 when compared to last year.  The TV budget is being raided to pay for 11% of the increase. About 28% of the extra expense is being called “incremental spending”. For the rest of the year, marketers may reduce funding of other ad categories to pay for the increased online video expense, and this includes online display.

Top buyers in the online video category include retail, health/pharmacy, CPG, and financial services.

Nearly all marketers, 93%, who use online video buy at least some of their space directly from publishers and 75% also buy from ad networks. In addition, 24% of publishers are now running their own private video marketplace. By doing so, these publishers are appealing to brands that would like control over where  their ads are appearing and which audiences they are targeting.

As the online video ad industry grows, the concept of digital ‘newfronts’, similar to the TV ‘upfronts’ has developed. However, only 25% of marketers say they are buying ads this way. Many believe that there is no scarcity of  ‘prime time’ spots in the digital sphere as has been the case for traditional TV.

To learn more about Online Video Watchers, check out the Audience Interests & Intent Report available on the Research Store at Ad-ology.com.

[Sources: State of the Video Industry. Adap.tv. 2013. Web. 24 Apr. 2013]