In my vertical search column last month, we looked at the opportunity for SMBs to use universal search to their advantage by producing and distributing online video. But what is the size of this local video market? There are lots of projections being thrown around for the overall video ad market, but what about local?
eMarketer, for one, predicts the overall online video ad pie to grow from $775 million in 2007 to $1.35 billion in 2008, and $4.3 billion by 2011. By comparison, today's U.S. television market is about $70 billion.
$1.35 billion is about 5 percent of the 27.7 billion projected for all US online ad spending in 2008. If the same were true on the local level, 5 percent of the total U.S. local online ad spend ($2.4 billion in 2008 according to Kelsey Group data) would be $120 million.
I think $1.35 billion is probably too bullish, and if so, video's percentage of overall online ad spending will be less than 5 percent this year. Furthermore, in local, video's percentage of the total online ad spend is less than the national figure. This is because online ad networks aren't as developed as the national market, where players such as BrightRoll and VideoEgg place video throughout quickly expanding content networks.
However, video's share of the local online ad spend will equal or surpass the corresponding national number over time. This will be driven by growing demand for video advertising at the local level, and the resulting development of local ad inventory throughout local search and IYP sites.
Some of the factors causing this video advertising demand include:
- Online distribution has lowered the barrier for SMBs to advertise with video (previously limited to cable spot advertising).
- Broadband penetration and killer apps such as YouTube have popularized online video almost to the point of an expectation in search – and by extension, local search.
- Video is traditionally a strong and valued branding medium.
- The "lean forward" mode of watching online video takes advantage of direct response capabilities of the Internet.
- The "vanity factor" that has traditionally driven a considerable degree of local advertising (in yellow pages) is present in video.
- Given increasingly "blended" SERPs, video can be a powerful differentiator among text links.
To further support this, a December SMB survey done by AT&T in 10 U.S. markets, showed that 53 percent expect to buy online video ads within the "next couple of years".
As the $15 billion U.S. Yellow Pages industry only penetrates about a third of the SMB marketplace, video could be one of the ways to combat declining revenue by appealing to a new breed of advertisers.
If publishers are to grow top-line revenue, a significant percentage of the overall revenue mix will have to come from places where new growth is happening, such as search and video. Some progressive Yellow Pages publishers have publicly stated that at least 30 percent of revenues should come from these and other non-print sources.
As publishers are driven by this to resell search advertising and online video in earnest, the needle will begin to move for aggregate local video ad growth. Many IYPs and local search sites are already moving in this direction, including Citysearch, Superpages and Yellowpages.com – each of which formed reseller relationships with local video vendors in the past year.
SEO for IYPs: Video is the Key
Back to SEO, video also has the ability to drive traffic for IYPs and local search players. As examined in the first part of this column, universal search enables well-optimized video to improve search rankings for IYP listings and drive incremental traffic back to them.
But despite IYPs' realization that video will be a valuable tool in their ongoing ad sales efforts, their video SEO strategies have a long way to go. SMB video clips in the IYP environment are mostly buried within listings.
The opportunity here comes down to the fact that search is a sizable front door to most online experiences (duh); and local search is no exception. Although some IYPs have valuable URLs and strong brands, they also benefit from significant upstream search traffic.
So if they can get on the video SEO train in a more concerted way, they can reap these same benefits to a greater degree, given the opportunities universal search will offer. At the intersection of video and SEO, local search sites and IYPs – as the traditional "owners" of local – have the most to gain, and the most to lose.
Meet Your Favorite Search Engine Watch Contributors
Many of SEW's leading expert contributors will be at ClickZ Live, the new online and digital marketing event kicking off in New York (March 31-April 3). Hear from the likes of: Thom Craver, Josh Braaten, Lisa Barone, Simon Heseltine, Josh McCoy, Lisa Raehsler, Greg Jarboe, Dan Cristo, Joseph Kerschbaum, John Gagnon, Eric Enge and more!