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May 21, 2010

Rise of video ads

A slightly modified version of the longer article that appeared on WSJ's India Chief Mentor Blog:

An article in IBD's highlights the strong rise in the popularity of video advertising among brand advertisers in the US as well as the potential headroom for further growth. (Hat tip: Paul Kedrosky)

Online video ads are more engaging than other types, say ad executives. Woolford says a good example is Toyota's "Swagger Wagon" ads for its Sienna minivan. In one, a father and mother relate, in rapper style, about how cool their minivan is. It's a viral hit, nearing 1 million views on YouTube in two weeks...The rise of more portable devices such as Apple's (AAPL) iPad tablet computer will only accelerate the amount of video viewed online, which should boost ad rates, says Retrevo co-founder Manish Rathi.
This strong growth trend should spell good news for Indian VC funds Helion Ventures and Nexus Ventures, which have, among them, invested into three cross-border companies that operate in the online video ads space.

I also wonder what this spells for Google’s revenues as and when it decides to get more aggressive with advertising on YouTube (which it acquired for $1.65 billion in 2006.)

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports.