January 9, 2007, 12:00 AM

Internet video audience will top 157 million by 2010

More than one-third of the U.S. population viewed video on the Internet at least once per month on average during 2006, but the market is still only in its infancy, according to eMarketer.


More than one-third of the U.S. population viewed video on the Internet at least once per month on average during 2006, but the advertising market is still only in its infancy, says a new report from eMarketer.

By 2010, the U.S. Internet video audience will have grown 45.8% to an estimated 157 million from 107.7 million in 2006, the report says. But the use of Internet video as a marketing and merchandising tool by web retailers and others is still limited. For example, clips are still fuzzy or halting online. Also, because there is no search engine for video, users can`t navigate to videos advertisers might be sponsoring, says eMarketer senior analyst David Hallerman.

“For all the clips playing, online video advertising currently comprises just 2.6% of total Internet advertising spending in 2006,” he says. “Video still has a long way to go.”

A closer look the video-viewing audience shows male users outnumber female users, according to eMarketer. But the average video seeker is far more likely to be heading toward middle age rather than heading for his first job, says Hallerman.

"With the advent of improved video quality and robust video search that offers a 21st century version of the `TV Guide,` marketers will find a fair degree of receptivity to online video ads," says Hallerman. "Even today, much of the audience is responsive."

Retailers are interested in using more video-related content to sell merchandise online. But so far only a handful of merchants have an actual program in place. Among the online merchants using video is Buy.com, No. 36 in the Internet Retailer Top 500 Guide to Retail Web Sites. In August, Buy.com partnered with Grouper Networks Inc., a user-generated video sharing service, to enable Buy.com users to watch, share, create and upload video product reviews via Grouper’s Video Partnership Program, which employs the company’s new one-click WebCam technology. Buy.com shoppers can create and watch video reviews embedded directly on product pages.


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