Who’s Watching Digital Video? A Diverse, Expanding Audience, IAB Says

Who’s Watching Digital Video? A Diverse, Expanding Audience, IAB Says

Alex Gayner and Zosia Mamet speak onstage at Refinery29’s NewFront presentation in May 2017.Fotografia de: Photo: Getty Images

As publishers prepare to woo the advertising industry next week, the Interactive Advertising Bureau has released a new report making a case for media buyers to spend big on digital video.

The study, released Thursday, touts the size, diversity and purchasing intentions of viewers of original web video and says they’re somewhat more receptive to advertising messages from brands.

The report comes at the outset of the annual NewFronts, a weeklong spree of presentations where companies from the New York Times and Vice to YouTube and Oath court marketers in an attempt to secure advertising commitments for their upcoming slates of programming. The IAB, an online advertising trade body, hosts the NewFronts.

Digital video publishers are aiming to pry loose more dollars from advertisers who have been slow to shift their budgets from TV to new video formats. This year, upfront digital ad spending is estimated to grow 25% to $3.64 billion, according to eMarketer. Upfront TV ad spending, meanwhile, is expected to increase 3% to $20.3 billion.

While spending on digital video has increased in recent years, video creators haven’t shared equally in the riches. Bigger players like Google’s YouTube and traditional TV networks, which have increasingly embraced streaming their shows online, continue to dominate advertisers’ digital video outlays.

Despite that, there’s a sizable audience for original digital video. The audience among U.S. adults has expanded from 45 million in 2013 to 72 million in 2018, an increase of 60%, according to the IAB.

The report defines original digital video as ad-supported, professionally produced and distributed digitally, encompassing longer original series as well as short clips and extras. The report distinguishes this content from other forms of video, such as analog TV shows that are streamed online or commercial-free series streamed by Netflix and Amazon Prime.

According to the IAB, more than a third of viewers of such original digital video content are cord-cutters or cord-nevers, meaning that advertisers can’t reach them through traditional pay-TV because they have ditched their subscriptions or never signed up in the first place.

They also skew younger and more diverse, according to the report. About 60% of the audience is 34 years old or younger, giving marketers access to a significant swath of millennial and Gen Z viewers. About 43% of the viewership of original digital video is nonwhite compared with 36% of the total U.S. population, according to the report.

“Younger groups are very open to digital video, and they are open to information on it, especially from brands,” said Anna Bager, executive vice president of industry initiatives at the IAB.

The report also describes original digital video consumers as on par with their streaming TV counterparts when it comes to viewing frequency. About 86% of original digital video consumers watch ad-supported original video content weekly, while about 89% of viewers who watch TV shows online do so at least once a week.

They also consume video in their own “personal prime times” throughout the morning and afternoon, departing from the traditional evening prime-time viewership on TV, the report concluded. The IAB’s study was based on more than 2,000 online interviews conducted in the U.S. in March.

Despite the appeal, some ad buyers aren’t convinced that they need to buy digital video in an upfront manner since in most cases there is a near-unlimited supply of inventory. By contrast, the TV upfront has continued to remain relevant, despite rating declines, because there is a much more limited supply of commercial inventory on TV.

The IAB is touting the benefits of online video heading into a critical time period. Some ad buyers have long been somewhat skeptical about the quality of online video and have pushed aggressively for publishers and platforms to invest in higher-quality content. Compounding that hesitation, the sector is facing headwinds after advertisers’ messages have repeatedly shown up alongside YouTube content deemed unsafe for brands, which has caused brands to re-examine their ad placements.

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