June 8, 2011, 11:15 AM

Spending for online video ads will increase 52% in 2011, eMarketer says

Search, though, still accounts for most web advertising dollars, the research firm says.

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Spending for online video ads will grow at a faster rate this year than will other forms of web advertising, according to a new report from eMarketer. The market research firm says marketers in the United States will spend $2.16 billion on online video ads this year, up 52.1% from $1.42 billion last year.

Still, video ads will account for only 6.9% of all web advertising spending in 2011.

EMarketer predicts that online advertising spending this year will reach $31.3 billion, up 20.4% from $26.0 billion last year. The market research firm bases its projections on financial reports from major advertising firms and by analyzing other research estimates, including from online ad tracking firms. Internet advertising this year will represent almost 20% of all major media ad spending in the United States. Last year, web advertising accounted for 17% of all spending; by 2015, web spending will account for 28%, eMarketer says.

“The Internet has become as fundamental as television to advertisers,” says eMarketer principal analyst David Hallerman. “As consumers continue to increase their time spent online and as the resurgent economy continues to bolster ad budgets, we’re going to continue to see an influx of dollars toward the Internet. More ad formats, such as video, and more channels, especially social media and mobile, are also key contributors to the spending gains.”

Search advertising still takes up most online advertising dollars, eMarketer says, with marketers expected to spend nearly $14.4 billion on that ad format this year, up 20% from $12.0 billion in 2010. But display advertising spend is growing more quickly, and eMarketer projects online display ad spend will reach $12.3 billion this year, up 24% from $9.9 billion in 2010.

Besides the increase in video ad spending, the growing popularity of banner ads is helping to support the growth in overall display advertising spend, the market research firm says. Advertisers will spend $7.6 billion on banner ads this year, up 22.6% from $6.2 billion last year.

“High inventory and lower pricing have made banner and video ads increasingly attractive formats for brand marketers, many of which have seen their online ad budgets grow during the past year,” says Hallerman. “The rise of Facebook has been another prime factor in display ad growth.”

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