Break Media’s Digital Video Advertising Trends 2012 study features the digital video landscape for the upcoming year. The leading creator and publisher of digital video content revealed that digital video advertising spending is up and expected to continue to increase throughout 2012. In addition to organic growth of budgets, the increase is projected to come from a number of existing sources, including 32% from television budgets, and be reallocated into new platforms such as mobile, connected devices and the emerging ad selector format.
The study compiles data from hundreds of advertising decision-makers about their digital video advertising plans heading into 2012, revealing that video advertising spending is growing faster than expected. But, in addition to discussing budget growth and allocation, the study includes shifts in cost models and distribution formats.
Use of video ad networks has reached a nearly universal level, which has also driven uptake in usage of the Cost per View (CPV) model. The video ads, themselves, come in a number of formats (see Buzzwords), but most advertisers still prefer pre-roll. However, the mass adoption of multimedia-ready smartphones and tablets has driven significant growth in mobile, which increased almost two-fold in the past year and is expected to jump another 16% in 2012. Key findings from the study include:
• Video spending to increase: In the coming year, 68% of advertisers will increase the share of online display advertising devoted to video ads.
• Video budgets being driven up from multiple sources, including TV: Advertisers increasing video ad spend in the next year say the dollars will come from television budgets (32%), overall advertising budget growth (38%) and non-video display budgets (45%).
Digital video advertising is growing at light speed, and with it, top advertisers are finally seeing the web as a branding environment for their campaigns. This phenomenon is inspiring a growing consensus among advertisers that the convergence of television and online video is approaching a tipping point, say experts.
IAB reaffirms the shift in ad dollar with the release of their study, conducted by Advertiser Perceptions, showing that 69% of marketers and 55% of agencies plan to increase their Digital Video Advertising (DVA), with a 22% growth predicted in the next 12 months.
Some of the other key findings of the study include:
• Advertisers are finding that their audiences respond better to DVA, with consumers showing a higher engagement rate with online video;
• DVA is more trackable and targetable and DVA production is less expensive, making it more cost efficient;
• Marketers will migrate TV ad dollars to digital video based on the belief it will deliver better ROI; agencies and television decision makers will shift ad dollars in an attempt to follow their target audiences;
• Among the different available DVA formats (pre-roll, in-banner, expandable banner, mobile video, rich media overlay and post-roll), agencies primarily use pre-roll while marketers are not committed to any specific format. Most respondents believe the appropriate length is 15 seconds;
• The preferred pricing model is CPM;
• A majority of marketers and a majority of agencies believe they should each be responsible for deciding whether to use DVA and how much budget to allocate to it.
The IAB said mobile advertising was the fastest-growing category in 2011, jumping 149% to $1.6 billion from $641 million in 2010. Mobile also doubled from 2.5% to 5% of total online ad dollars this year and looking at IAB’s graph above, we can vividly imagine how DVA will spread its wings this year.
By Daniela la Marca
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