Thursday, April 17, 2008

Ad revenues from user generated video continue to grow despite recession

Some people have speculated that online advertising revenue would plummet with the economic downturn associated with the subprime crisis.

A Washington Post Business story today (April 17) by Kim Hart: “The Smart Money Watches You Watch Videos: Sophisticated Tracking Gives Marketers a New Edge,” link here.
The print version of the article (you need to pay for that!) includes a big chart showing sales of online video advertising rising steadily from 2006 to 2009, almost tripling, more or less with an even slope (Algebra I, have you) and continuing to grow through 2008 despite economic problems. It's not clear how this compares to ad revenues from "ordinary" websites and blogs with text and stills content.

This all reminds me of the time I worked for NBC in information systems (1974-1977), and company broadcast revenues were growing steadily despite the economic stagflation of the 70s (and loss of tobacco revenue then).

Market analysis companies like Nielsen (remember them – broadcast networks have whole IT systems around Nielsen) analyze VouTube viewing and even rewinds. All of this comports with newer techniques to track Internet surfer behavior to target ads, a practice that has privacy advocates worried because it might invite practices close to keystroke monitoring and spyware, and be difficult for security monitors like McAfee to filter properly.

Remember, though, “free content”, even this content, eventually has to be capitalized somehow. The recent book by Jonathan Zittrain on the future of the Net speaks well to this issue, review.

Late on Thursday April 17 (after Wall Street's close), Marketwatch released this story (by John Letzing), which surprised analysts concerned about Internet advertising revenue: "Google profit grows 31% amid concern over search ad businessGoogle profit grows 31% amid concern over search ad business," link here. The Techcrunch blog has this report, and today bloggers are reporting genuine surprise in comparison to the earnings report that had been expected (search engines will turn up many pessimistic predictions written before today). Remember, however, some other experts on Wall Street had expected Internet "tech" and media companies to do much better than other sectors (like financial) throughout the current "recession"; business models are relatively solid in established tech companies (compared to a decade ago before dot-com busted), and now found to be unsound and "Bubbles"-like in other areas (like finance)

So far, I have put all my own videos here on my own domain, although I may start to use YouTube soon for some of the more "political" material. But I want to be sure that the audience would build properly first.


Posting on my first Newseum visit today is here.

Update: April 22, 2008

The Wall Street Journal had a "media & marketing" article by Emily Steel on Monday, April 21, p B8, "Agencies Know the Score on Web Tracking," with discussion on comScore estimates, here.

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