Video Advertising on Increase, Winning the Budget Away from TV Ads [Report]

Video Advertising on Increase, Winning the Budget Away from TV Ads [Report]

According to AOL’s sixth annual State of the Video Industry report, marketers are finally re-prioritizing their traditional advertising budgets and adding dollars to digital video. The survey’s finding that TV budget growth is stagnating, with a sizable portion of those dollars being reallocated to video advertising, is long overdue.

I know that most of our long-standing readers were pioneers in online video before digital video became one of the biggest trends in the marketing business, but all video marketers should read AOL’s new industry report for themselves. There’s a lot of critical data that will generate some new strategic insights and change some old tactical advice. Before we do that, let’s check out these numbers:

  • Spending on US digital video ads grew by 42% to $7.46 billion in 2015
  • That number is expected reach over $13B by 2019

There are at least three more key findings in there that you will want to know about before your next conversation with a brand, an agency, or a publisher:

  • Spending on mobile video advertising has increased by 18% since 2014.
  • 91% of agencies, and brands, are buying video inventory programmatically, and 88% of publishers are selling their video programmatically. That’s an increase of 37% since 2014.
  • Agencies and advertisers and agencies devote over 30% of their overall video budgets to branded video content.

Video Ad Spend Draws from TV Budgets

Where is the money coming from? According to AOL’s survey of nearly 300 agencies, publishers, and brands, approximately half of the buyers who increased their digital video spending this year reported that the additional spend came from their TV budgets. And 39% of buyers said their increased digital spend is coming directly from broadcast TV, which is more than twice as many as the 18% that said this in 2012. And 31% said they were funding their digital video efforts with cable television dollars, up from 18% in 2012. Year-over-year, television remains the fastest growing source of digital video ad budgets, with display in second place.

Agencies are looking for “device-agnostic video consumption” as well as find viable alternatives to the cost of TV advertising, which, according to AOL, has increased by just under 30% since 2012. Heck, YouTube hit a billion monthly users in March 2012. If brands and agencies were really searching for “device-agnostic video consumption,” you’d think they would have discovered YouTube before now. For the past three-and-a-half years, YouTube’s viewership – month in and month out — has been roughly nine times larger than the largest Super Bowl audience in history.

Still, it’s good to know that nine in 10 buyers are shifting dollars from linear TV to digital channels, reallocating an average of 10% of their television budgets. More specifically, over 3.5x more buyers since 2012 have shifted 11-20% of their company or clients’ broadcast or cable TV budget to better support their digital efforts. Of the marketers who are moving TV dollars towards digital channels, 88% are shifting that television spending to some form of video, such as desktop, mobile or over-the-top (OTT). In fact, 63% of buyers claimed that the bulk of this shifted spend is going to desktop video, with 55% directing the reallocation to mobile video.

So, what should video marketers do now that more dollars are piling into video? Well, we can expect that a bunch of blow-ins, poachers, claim-jumpers, usurpers, interlopers, carpetbaggers, and Johnny-comelatelys will attempt to elbow their way to our table and try to eat our lunch before we can. Now, many of us will be tempted to blurt out, “I was here first.” But, it’s pretty hard to stop people from jumping the queue. Besides, most of the brands, agencies, and publishers who will hiring video marketers are less interested in what we did for others back in the old days of online video, and are more interested in what we can do for them in today’s world of digital video.

And that means we can’t rest on our laurels. We have to continue keeping up with the latest news and trends in an industry that is changing as rapidly as it is growing. If a newcomer can become YouTube Certified by successfully completing an in-depth training program, then we will have to pass the exam, too. In other words, our learning curve is never going to flatten out.

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