Digital Video Growth Drives More Efficient CPMs

Digital Video Growth Drives More Efficient CPMs

Mobile video is growing, programmatic buying is rocking, and over-the-top devices continue to gain traction. All the latest news and reports tell us that, and those are all positive trends for the digital advertising business. But one of the key questions is, what’s next? As digital video moves past the rapid growth of the early days, what kind of role will it play in the overall ad business?

Video will play a critical role in increasing overall ad revenue and CPMs for brands, according to 500 advertisers and media agencies in France, Germany, the United Kingdom, Italy and Spain surveyed in a Forrester study, commissioned by Videology. While the report is germane to Europe, the findings are both useful for marketers and agencies doing business in Europe, and as directional insight about trends.

Marketers are betting on the boost in revenue because of the rise in data-driven advertising. The use of more and better data makes more detailed targeting possible, which increases the cost efficiency of ads. Many brands are predicting big growth potential in targeted video ads, the report found.

Marketers also expect to see a continued move toward cross-platform viewing. “Video will continue to shift to online streaming and migrate across devices. Respondents in each group agreed at the 70% level or higher that consumers will shift more of the viewing of full-length TV to streaming from the networks’ sites over the next three years,” the report said. In addition, more than 70% believe that the time spent viewing TV on connected TVs, smartphones and tablets will significantly increase in the next three years.

Media companies also predict big growth in over-the-top devices. That finding dovetails with Roku’s news this week that it crossed the 10 million threshold for devices sold since the company launched in 2008, with anincrease of 2 million units this year alone.

Overall, growth in digital consumption is poised to continue dramatically. Nielsen reported in its just-released cross-platform study that online video viewing for the 18-to-64 group has doubled from 13 minutes in the second quarter of 2012 to more than 27 minutes in the second quarter of 2014.

Meanwhile, mobile growth is monstrous. Ooyala said mobile is on track to account for half of all video views by 2016, up from 27% of online viewing in June.

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