Why everyone should invest in digital video this year

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Digital video advertising is growing fast. According to eMarketer, 68 percent of marketers plan to increase their digital video budgets in 2016, bringing online video ad spend to nearly a third of total projected digital display ad spend in the United States. Similarly, Business Insider Intelligence predicts that online video ad revenue will reach nearly $5 billion in 2016, more than doubling since 2013. During the same time period, TV ad revenue is predicted to decline by nearly 3 percent per year — not surprising considering that 4.9 million U.S. households unsubscribed from traditional pay TV services last year alone.

Leading the cord-cutting trend are Millennials, with 18-34 year olds opting to stream entertainment content through YouTube or Netflix. This generation of “digital natives” is also the heaviest users of mobile devices for their media consumption. And with Millennial spending power predicted to reach over $2 trillion this year, advertisers must invest in a true cross-screen video strategy in order to effectively reach this market.

Digital video also addresses certain issues around user experience and ad quality for all viewers, an issue that has never been more top of mind for both marketers and publishers in the wake of heightened discussions around ad blocking. Video offers an ad format to which viewers are already accustomed thanks to traditional television. From a mobile perspective, video provides a minimally disruptive experience for users when implemented in-feed and features attributes such as disappearing players, while simultaneously driving an almost immediate lift in ad recall, brand awareness and purchase consideration.

A growing amount of video content is now ad supported for connected devices, which we have already started to see with companies like Hulu, Tubi.TV, and Popcorn Flix. Devices themselves are becoming increasingly converged: smart phones are used to stream programming, and can also be used as TV remotes. What were once concrete devices, requiring separate and distinct strategies — mobile, desktop, television — are now more interconnected than ever before. As a result, publishers and marketers must adjust their strategies accordingly to remain competitive. This is especially critical as video becomes increasingly accessible and affordable to publishers of all sizes, no longer limited to the big players with big budgets.

Looking ahead, while traditional television viewing may be decreasing, the device itself is being accessed in completely new ways to accommodate fluctuating consumption patterns. Instead of set programming, users accessing content through IPTVs or connected TVs now have the ability to pick and choose what content to watch and when, creating a unique opportunity for marketers. Instead of buying shows and segments, marketers can come closer to forming a one-to-one connection with an individual viewer. Digital video advertising options allow content providers to more effectively and accurately target specific users across devices with relevant marketing messages (Not to be confused with addressable TV advertising, which refers to geographic, demographic, behavioral, and household level segmentation through traditional television advertising).

As audiences shift, publishers need to keep a clear understanding of the viewers consuming their content in a way that is meaningful to advertisers. Knowing what percentage of a publisher’s audience is consuming content via tablets, mobiles, desktops, and connected TVs, coupled with user demographic information provides advertisers with the data they need to deploy marketing campaigns for a maximizing revenue effect.

Publishers that enhance their digital strategy by layering on device data can enrich their inventory immensely, and as a result, seamlessly transition their inventory from television to digital video to significantly galvanize their monetization engine.

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