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Study: Streaming Ad Market to Explode

It's too late for the likes of Pseudo, but streaming advertising is poised to see tremendous growth, according to a new study from DFC Intelligence.

The study anticipates that streaming ads supporting audio and video programming will rake in $138 million this year. But it's a severely underutilized medium, with great potential for expansion, according to the San Diego, Calif.-based firm: less than 10 percent of those streaming content actually insert ads.

"There continues to be substantial growth in streaming usage for both audio and video programming, and these are loyal users," said DFC analyst Paul Palumbo. "Because advertising in streaming media can be a very effective way to reach a highly targeted and qualified audience, we see strong long-term growth potential for this market, particularly for cross-platform brands."

The groundwork is there already, according to Palumbo. Already, about 63 percent of Internet audio broadcasters have actually deployed or have the capability to deploy in-stream advertising. And about 24 percent of streaming video publishers have ad-insertion capabilities.

Not surprisingly, audio streamers so far have been more successful than their video counterparts in attracting advertisers. Currently, about 1.8 billion audio avail opportunities exist per month, with CPMs ranging from $5 to $60. Additionally, there are about 165 to 185 million available video opportunities per month, with CPMs ranging from $30 to $120. But in-stream video ads will only represent about 30 percent of total streaming advertising this year, according to the report.

But as broadband rollout continues, and high-bandwidth connections become available to the average consumer, Palumbo is anticipating accelerated growth of streaming video ads.

As a result, the analyst likens the relatively small size of streaming advertising to cable television -- just before it saw explosive growth.

"Cable TV advertising was worth only $50 million in 1980," he said. "Today it is worth over $13 billion."