Online video advertising continues to be an important monetization tool

Michelle Clancy | 12-10-2012

Last year saw a milestone for online video monetization: there were 693 billion ad-funded video streams in 2011, research from IMS Research has revealed.

And, going forward, advertising revenues are projected to reach $13.4 billion in 2017, while more than $20.6 billion in revenue will be created from transactional and subscription over-the-top (OTT) video services.

IMS Research Principal Analyst Anna Hunt said growth in OTT video advertising will be mainly driven by the growth of short-form content streaming via tablets and PCs.

"Companies such as Google and AOL will have a significant share of these revenues, as they implement tactics such as forming new strategic relationships to monetize original video assets, directly approaching ad buyers and offering guarantees for audience delivery," she said.

However, smaller streamers outside of the AOLs and Googles of the world will struggle to develop effective business models and boosts revenue potential, according to the report, and will need to consider a blend of models outside of pure advertising support.

"Although most companies are not large enough to sustain their business solely on OTT advertising revenues, aside for widely-popular portals such as YouTube, advertising is and will continue to be an effective method of monetizing OTT video," Hunt said.