In 2017, advertisers spent more on video ads than banner ads for the first time. In the first half of 2017, advertisers spent $921 million on video ads which topped the $903 million spent on banner ads. This is in large part due to how many people are watching videos online. In a recent report, Cisco suggests that by 2019, 80% of all consumer traffic will be video. On mobile devices, 70% of the advertising traffic will be video ads. This yields a 14-times growth within the next five years. Advertisers and programmatic media buyers have a great opportunity to embrace this change, to make content that resonates with consumers and include video in more of their media plans.
Video display ads are expected to be the second leading highest spend platform in 2018 and in 2019 (source: eMarketer).
It isn’t just the growth in video consumption that is propelling a large spend on this ad format, there are also great opportunities for return on investment. Amazon, who owns one of the larger DSPs in the programmatic space, says that including a video ad increases the propensity to buy by up to 35%. Although video ads naturally cost more to produce, they are more engaging for consumers thus making them more effective. Advertisers need to ensure that they are still creating quality content, rather than a 15 second pre-roll TV ad.
Video is Winning the Attention Battle with Consumers
Consumers are now pre-programmed to ignore banner ads, so media buys need to make sure that this doesn’t happen with video advertising as well. Consumers are already watching videos, so if videos ads are interesting, they will remain hooked. As of now, video ads have the highest click-through rates of all digital ad formats at 1.84% which in large part is due to video trends yielding more brand engagement as opposed to direct-response, “buy this product” ads. Advertisers benefit because video ads offer live and very granular insights instead of static panel insights offered by other ad formats. There are many advantages for both consumers and advertisers that this ad format will continue to offer, as long as advertisers do not abuse it.
A Shift Towards a Video-First Strategy
The opportunity for revenue in video for publishers and advertisers is equally appealing and both are embracing video advertising as a dominant format. Consumers have grown accustomed to the pre-roll and post-roll ads that appear when watching a video. But mid-roll, outstream and social in-feed ads are on the rise, now accounting for more than half of video spend ($478 million). Advertisers will need to proceed with caution with this ad format. Consumers do not like having their content disrupted and if this platform is abused, more people will start to use ad-blockers, thus making the ads irrelevant.
If advertisers and marketers stick to making quality, non-intrusive, creative video ads, consumers will begin to adapt pre, mid or post-roll ads as a ‘native’ format and part of their online video watching. This will allow programmatic media buyers to continue to see success with their video campaigns by both engaging consumers with brands and creating an overall return on investment.
Read about the other nine trends that we are predicting will be the key to success for programmatic buying teams in 2018 here.
If you haven’t already, there is no time like 2018 to get on the programmatic bandwagon. If you need to get started Digilant University has all the information you need to get up to speed and get going. Need more information, you can also reach out to us here.