Saturday, August 28, 2010

Video Advertising: Will Pareto Distribution Hold?

Video advertising might be on the cusp of a major advance, at least for some ad networks and a few applications and sites, such as Hulu or YouTube.

What is not likely is that much of the revenue will be gained by smaller firms, if typical market dynamics hold. What one would have to expect is that 20 percent or fewer of the providers will get 80 percent of the video ad revenue.

That Pareto distribution, commonly thought of as the "80/20" rule, occurs normally in business and in many natural processes as well.

Not many markets, if any, ever escape a stable structure of that sort. Video advertising likely will fit into that pattern as well.

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