The rising importance of video ad spend

Almost 60% of digital marketers’ budgets are currently spend on digital video assets. This conclusion has been made by the latest IAB advertising survey “Digital Content NewFronts: 2018 Video Ad Spend Study”. That’s an increase of more than 50% over the past two years – a trend that is even going stronger in the near future: the majority of the 353 interviewees said that they plan to raise those budgets over the next 12 months, two-thirds of them are going to shift from TV to digital video.

But where does the popularity of the format come from?

“More clients are starting to understand that this is where TV is headed (Agency, Director-Supervisor, Household Goods, TV Primary).”1

“We feel that spending more in this category has a promising outcome, providing us with a better ROI for the 2018 year (Agency, VP+, Food and Beverage, Digital Primary).”2

Other mentioned reasons are large inventories of digital video offerings and therefor an effective audience reach, good audience insights/data analytics that can be used to identify and segment target audiences better and attractive costs/CPMS. Combining the great volume of video ad inventory with more and more improving targeting options, it makes sense to use the format across the whole advertising funnel. While agencies mostly use video to generate awareness in the upper funnel, marketeers are already focusing on converting users within the middle funnel.

Original Digital Video Across the Funnel
Source: IAB | Video Ad Spend Study | April 2018

With such a flexibility, it is not surprising that the overall video budgets are rising – but which channels will benefit the most? Short answer: social media. Next to Youtube, Facebook and Instagram come to mind who are pushing heavily towards their video ad formats – at least 50% of the respondents said they are going to increase their spendings in that area. In addition, native advertising, mobile specific video inventory and programmatic buying are mentioned as main drivers for growth.

Spending Optimism for Video Content Types
Source: IAB | Video Ad Spend Study | April 2018

In conclusion, all participants of the survey seem to agree that digital video advertising is an essential part of their media buying strategy – on average more than $10 million are spend here annually. Whether those budgets will be managed in-house or via agencies needs to be seen but it looks like as if there will be a shift: 74% of the questioned marketers agreed that their company will work less with agencies this year and shift those funds to direct to consumer advertising.

For more information, you can get the full study here.

1 IAB | Video Ad Spend Study | Page 24 | April 2018 | URL
2 IAB | Video Ad Spend Study | Page 24 | April 2018 | URL

Leave a Reply

Your email address will not be published. Required fields are marked *