Spending on Digital Video Advertising to Skyrocket


Two-thirds of media buyers plan to shift some portion of their budget from TV ad buys to digital video this year, according to the Interactive Advertising Bureau, an industry group that tracks digital advertising. More than 50% of buyers plan to increase digital and mobile video spending in the next twelve months, according to the group.

The findings are from a survey IAB conducted of over 350 marketing and agency executives in March of this year who work at companies with more than $1 million in yearly advertising spends. More than half of the participants were senior level, with a job title of VP or higher.

Advertisers will raise spending on digital and mobile video by 53% compared to two years ago, to an average of more than $10 million annually, according to the findings. Investment in original digital video (ODV) programming is also expected to grow substantially by the end of this year. ODV spending has been rising steadily since 2016 but is expected to increase a whopping 68% by the end of 2018.

Nearly 9 in 10 advertisers say that ODV programming is an essential part of their marketing mix because it allows for better reaching of audiences that are unavailable through tradition television advertising.

Automotive and telecom companies will be the biggest spenders according to IAB, with household goods companies representing the biggest increase in budgets with an almost tripling of spend since 2016.

The growth in digital advertising budgets comes mainly at the cost of advertising budgets in traditional mediums, specifically broadcast and cable TV. Forty-one percent of respondents said they plan on shifting funds from broadcast TV ad budgets to digital video ad budgets. An identical 41% said they plan on shifting funds from cable TV advertising.

Only 28% of respondents said they plan to increase TV ad spends over the next twelve months. Fifty-six percent of respondents said their TV ad spends will remain the same over the next twelve months. Sixteen percent said they planned on decreasing TV ad budgets, by far the highest for the categories measured.

The largest beneficiaries of the shifts seem to be social media channels. Fifty percent said they plan to increase advertising budgets for social media video, nearly ten points higher than the next category, TV shows that are aired online.

Media buyers are also planning significant spending in emerging advertising channels. Eight in ten said they plan to invest in a new advertising format in the next twelve months, with 48% planning buys in Voice Artificial Intelligence advertising (platforms like Google’s Home and Amazon’s Alexa, for example), and 44% are planning buys in virtual reality.

The findings reflect a realization that new advertising mediums, and digital video in particular, are increasingly important part of marketers’ strategies.

“Marketers’ commitment to digital video—especially original digital video—has been skyrocketing over the past few years,” said Anna Bager, Executive Vice President, Industry Initiatives, IAB. “These findings reflect consumers’ enthusiasm for the dynamic storytelling which original video programming delivers in spades, and the power of the medium to deliver strong ROI.”

Photo by Max Pixel

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