Investment in original video content growing by 30% in 2019

A number of new research reports in the US have pointed to a marked increase in investment in original video content for use in advertising campaigns.

The two reports have been published by the Interactive Advertising Bureau (IAB) and eMarketer and a summary of the findings was also featured on the Marketing Land website.

 “Advertisers expect to dedicate more than half of video budgets to original content while increasing investment in programmatic video inventory.”

Source: Marketing Land

Annual spend on video adverts is expected to grow by 31% in 2019 and the report says

 “The core benefit of advertising with original video content is the ability to serve up custom creative in the form of high impact branding and prominent placements.”

Source: Interactive Advertising Bureau

The responses to the surveys carried out as part of the research indicate that more than two thirds of digital budgets are being allocated to video with three out of four video advertisers planning to increase their digital video advertising spend in the next 12 months.

Advertisers in the US plan to spend 25% more on digital video than in 2018.

“Increase targeting options, custom product integrations and a less cluttered ad environment were also factors contributing to the uptrend in original video ad spend.”

Source: Interactive Advertising Bureau 

eMarketer reports that more than half of all programmatic advertising spend will be video this year – 52.5% rising to 53.7% by 2021.

89% of survey respondents agree that “my investment in original digital video programming will grow and make up a larger slice of my advertising.”

What is programmatic video advertising?

This is essentially using audience targeting through Google (other search engines are available), the various social media channels and YouTube to place your content in front of your target users.

YouTube video advertising is a big driver for this with their TrueView video advertising format.

If you’d like to know more about this then you should get a copy of our guide to setting up a YouTube Video Advertising Campaign.

So where is digital video being used?

It’s interesting (to me anyway) that responses to the IAB survey show that more than 75% of digital video content was being used outside of the social media channels with the breakdown of other locations being:

22% Social Media Channels

18% TV Shows Online

14% News Sites

14% User Generated Content

14% Original Digital Video Sites

13% Music Video Sites

87% of survey respondents agree that “original digital video is very effective for advertising direct to the consumer.”

And what is it being used for?

The report also includes a funnel analysis which includes details of at what stage of the sales process video is being used.

41% of survey respondents are using video to fulfil top of sales funnel objectives (awareness)

44% of survey respondents are using video to fulfil mid-funnel objectives (consideration)

10% of survey respondents are using video to fulfil end of funnel objectives (decision)

30% of survey respondents said they were using video at each stage of the sales funnel

87% of survey respondents agree that “original digital video advertising is as important as TV advertising for my media plan.”

How much are people spending?

The figures from the IAB report show a 31% growth in spend on video content in 2019, which equates to $9.1bn – an increase from $7.1bn in 2018 and $5.8bn in 2017.

Investment in original video content makes up slightly more than half of this total (52%) which shows a small increase from 2018 (50%) and 2017 (48%).

Using those figures, investment in original video content for video advertising purposes in the US in 2019 will be $4.7bn compared to $3.6bn in 2018 and $2.8bn in 2017.

And what ad formats are people using?

The survey also asked respondents to indicate the advertising formats that people had used in 2018 and plan to use in 2019 and the results show that the shorter form advertising formats are dominating.

57% planned to use 6 second video ads in 2019 (53% in 2018)

55% planned to use vertical video ads in 2019 (48% in 2018)

51% planned to use longer form stories in 2019 (42% in 2018)

49% planned to use shoppable video ads in 2019 (39% in 2018)

49% planned to use brand overlays in live streamed content in 2019 (48% in 2018)

48% planned to use interactive video ads in 2019 (48% in  2018)

41% planned to use Augmented Reality (AR) in 2019 (36% in 2018)

Horses for courses matters

Another interesting part of the IAB research was the attention given to each of the sectors surveyed and what channels they were using for their digital video advertising campaigns.

As expected, most sectors demonstrated use of a range of channels but the information provided in the report on the dominant channel split by sector is revealing.

The figures below show the preferred channel for each sector featured in the survey with details of the allocation of their digital video advertising budget allocated to that particular channel:

*The Interactive Advertising Bureau report was compiled following interviews with 350 marketing and agency decision makers across the US in February 2019 in the following sectors:

• Automotive
• CPG
• Fashion & Apparel
• Finance
• Home Furnishings
• Media & Entertainment
• Retail
• Telecommunications