Bizdom U 2009: Andrew Hwang

source: http://mediabiz.blogs.cnnmoney.com/2007/07/27/the-ugly-truth-about-online-video/?section=money_topstories

A recent report by a U.S. marketing firm, eMarketer, found that companies plan on spending $1.35 billion on online video advertising in 2008 and $4.3 billion in 2013! This is not surprising considering that Google just spent $1.7 billion acquiring Youtube and how Yahoo! and other web companies are developing their own online video sites. In addition, the two media giants, NBC Universal and News Corp., are teaming up together to form an online video venture. So how does this craze compare to the traditional TV advertising?

Last year, over $65 billion were spent on TV advertising, according to TNS Media Intelligence. The bottom line: TV isn’t going anywhere anytime soon- the two forms of advertising are still incomparable. The truth of the matter is that people still utilize TV more than the internet. “Most people still consume video on television. There is a lot of upside in online video but the business is still nascent. Conventional wisdom can sometimes get ahead of us. People act as if all TV and entertainment is on the Internet. That’s not the case,” says Paul Sagan, the Chief Executive Officer of Akamai Technologies (AKAM).

So before any small business plans on lavishly spending on internet videos thinking that it will give them the edge over TV advertising, they should consider the bang for their buck.  The U.S. population is only aging and older equals less technologically savvy.