Digital Video Advertising to Grow at Annual Double-Digit Rates

eMarketer expects US digital video ad spending will see double-digit growth annually through 2020. By contrast, TV ad spending will grow much more modestly, at rates ranging from 2.0% to 2.5%. Still, TV will remain dominant, with total ad spending reaching $77.17 billion in 2020, more than quadruple the $16.69 billion for digital video, as explored in a new eMarketer report, “Digital Video Trends Q2 2016: Monetization, Audience, Platforms and Content.”

A NewBay Media study sponsored by Akamai showed that 73% of US TV and video professionals polled planned to monetize their content with ads in Q1 2016, while 59% planned to use subscriptions. Those two methods beat out pay-per-view (37%) and electronic sales (34%).

Research firm Advertiser Perceptions found that 38% of US marketers it surveyed in December 2015 planned to draw funds from their broadcast budgets to support digital video ad spending. This was followed closely by print (36%) and cable (29%).

The same study found 72% of marketers planned to invest those digital video ad dollars with YouTube in the next 12 months. Comparatively, 46% of marketers intended to use Facebook, while other platforms including Hulu, ABC and Yahoo garnered less representation. This shows that even though Facebook and others are strong contenders in the video space, YouTube remains the go-to platform for roughly three-quarters of brands that do digital video advertising.

An April 2016 study from ad tech firm Videology showed that viewability continued to be a top campaign objective for US advertisers in Q1 2016. Viewable rate was a goal for 52% of campaigns served by Videology, compared with 48% for viewthrough rate and 38% for clickthrough rate. Actions and conversions did not register as major objectives. The data is a reminder that a video ad only works when it’s seen, and that video advertising remains fundamentally a branding pursuit.

Separate Q1 2016 study by ad platform Extreme Reach found the average viewability rate for digital video ads worldwide was 47%. This was based on activity on its own platform, which is predominantly US-based. Predictably, viewability was significantly higher for premium ads placed directly (62%) than for ads placed through networks and exchanges (42%). There was very little variability by ad length.

Although the average viewability rate did not change significantly in Q1 2016 from the full year before, there was a marked improvement in the rate for publisher-direct ads. In Q1 2016, these ads had an average viewability rate of 62%, compared with 55% in 2015.

And while the Extreme Reach data shows a distinct increase in viewability, the digital video ad industry still has plenty of room for improvement when it comes to making sure its core product is seen by end-users.

eMarketer PRO customers can view the full report here.

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