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In the future, online video will almost certainly prove so disruptive that TV advertising will have to integrate with it.
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Several factors are likely to contribute to that eventual fusion, most notably the availability of high-quality video content and associated advertising across five increasingly used digital screens—desktop computers, notebook computers, smartphones, tablets and connected TVs.
But in the near term, conventional TV will continue to dominate spending: At $64.5 billion, TV will make up 38.9% of total media ad spending in the US in 2012. In contrast, online video’s $2.9 billion will contribute a mere 1.7%. That imbalance is why Dave Morgan, chief executive officer of Simulmedia, said that digital video advertising "is more of a compliance buy when the clients say they want multiscreen."
Despite the fact that digital video ad spending is growing much faster than TV spending, more incremental dollars will continue to flow to the traditional screen. In 2012, for example, online video’s 46.5% growth rate will translate to $0.9 billion additional dollars over 2011’s outlays. In contrast, TV ad spending’s growth rate of only 6.4% works out to a $3.9 billion increase.
Given resistance from media companies and other established content owners, the fusion of online video ads and TV commercials into singular campaigns is likely to remain incomplete for now.