Web Video Ads Seen Hot in '05, Pop-Ups Not -- Report

Another report has come out today predicting the death of popups. With the google toolbar, SP2 and other browser additions, it is no wonder this method of advertising is going away. With 0ver 50% of home Internet users now using broadband, ecommerce sites will be able to provide greater product detail, product commercials and other marketing methods to sell more online. Here's the report for your review

Thu Jan 20, 3:13 AM ET Technology - Reuters Internet Report
By Michele
Gershberg

NEW YORK (Reuters) - Online video will heat up as a U.S.
advertising format in 2005, fueled by the use of high-speed Internet
connections, while attention-grabbing pop-ups will wane, according to a report
released on Thursday.

In a research report on online ad trends, Internet
agency Avenue A/Razorfish predicted that advertisers will embrace Web video in
2005, building on the interest shown by consumers last year. Avenue A/Razorfish
is the largest independent U.S. online agency, part of aQuantive Inc.
(Nasdaq:AQNT - news).


"I would not be surprised if every one of the
Internet portals has video as one of their top two focuses in 2005," Jeff
Lanctot, vice president of media at Avenue A/Razorfish, told Reuters. "I think
they all see it long-term as a way to grow their business."


Industry
analysts expect total Internet ad spending to surge between 20 percent and 40
percent this year to more than $10 billion, including paid search listings and
visual "display" ads.


That growth is already cheering top Internet
companies who rely heavily on ad revenue. Yahoo Inc. (Nasdaq:YHOO - news)
reported this week a 67 percent jump in quarterly marketing services revenue.


Yahoo operates one of the largest Internet portals against rivals
MSN, part of Microsoft Corp. (Nasdaq:MSFT - news), and AOL, part of Time Warner
Inc. (NYSE:TWX - news). MSN launched a free online video service last year,
giving viewers access to short news and entertainment clips accompanied by
advertisements.


"There is a huge opportunity for video-based
programing on the Web," said Doug Knopper, senior vice president at marketing
company DoubleClick (Nasdaq:DCLK - news). "We haven't figured out as an industry
what the model is just yet...but the experimentation will be on the video side."


DoubleClick competes with aQuantive in serving up and tracking
online ads.


Advertisers devote only a fraction of marketing budgets
online, but they are accelerating that spending as consumers dedicate more time
to the Internet, particularly as they research purchases.


Improved
technology that creates ads and tracks consumer response has driven more
companies to the Web. Internet portals are also drawing millions of viewers,
traffic that is beginning to compete with traditional mass media such as
television.


"Yahoo, AOL and MSN are like the old television networks
and the home page is their hit show," said Lanctot.


Portals are
commanding top prices for home page space, as much as $400,000 for a 24-hour ad
placement. Niche sites such as those catering to entertainment or travel have
been able to raise their prices by as much as 40 percent, he said.


At the same time, consumer backlash against pop-up ads, which appear
automatically when a Web site is opened, and increasing use of technology that
blocks those ads will diminish that format considerably, according to Avenue A.


"While (pop-ups) have been an effective low-cost, high-volume
vehicle, they are rapidly losing steam," the Avenue A report said. "Marketers
who have been dependent on pop ads should be testing alternative formats and
inventory."