Search ads to lose ground to video ads – IDC

14 Jun 2007

Broadband video advertising will eat into search advertising’s share of the online advertising market, research from analyst firm IDC has predicted.

Focusing on the US, the firm forecasts that search advertising will retain its No 1 position in the US market but will slip from the 40pc share it currently enjoys to 32pc by 2011.

Search advertising will grow in absolute terms in this period, however, as internet advertising is predicted to grow about three times as fast as advertising overall. Internet advertising was worth US$16.9bn in 2006, expected to rise to US$31.3bn in 2011, representing a compound annual growth rate of 13.5pc.

This poses a strategic challenge to Google, the market leader in search advertising, since more than 99pc of its income stems from this type of ad, IDC said. However, Google owns user-generated video site YouTube and will undoubtedly look to incorporate revenue-generating rich media ads onto the popular site.

“Broadband video commercials will experience their breakthrough in the coming years. This will create tremendous opportunities, but also threats, for old and new media companies,” said Karsten Weide, programme director, digital marketplace: new media and entertainment at IDC.

By Niall Byrne