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Demand for Next-Generation Video Advertising

The world of advertising is changing dramatically with shifts in consumer behavior and growing online and pay TV video-on-demand (VOD) services, according to the latest market study by In-Stat.

These shifts among others are creating a growing market for advanced video advertising, which In-Stat forecasts will approach $5 billion by 2013.

Online VoD services, such as Hulu, CBS Interactive and ABC.com, are already driving growing advanced advertising revenue across their platforms. During the next five years, Pay-TV approaches to advanced advertising tied to popular TV shows, videos, movies and music content will come into their own.

"The online VoD industry has the early lead for delivering Advanced Video Advertising, but the Pay-TV industry is moving quickly and will surpass broadband VOD by 2012," says Gerry Kaufhold, In-Stat analyst.

Because Pay-TV services deliver qualified, repeatable audiences, we can expect them to be able to negotiate higher Cost per Thousand (CPM) fees than online services.

Advanced Advertising is the next-generation approach that permits advertisers to dramatically improve their targeting, reporting, and overall return on investment (ROI.)

In-Stat's market study found the following:

- TV Everywhere initiatives will extend ad-supported Pay-TV VOD services to online and mobile users.

- Among the key companies enabling advanced video advertising are Adobe, Arris, Brightcove, Cisco, Motorola, Rovi, Sigma Systems, and thePlatform.

- The Cable TV industry's Canoe Ventures is working to help Pay-TV operators create large, plan-able audiences that can be cost-effectively sold directly to the large national advertisers.

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