TV Budgets Shifting To Video Ad Spend

Digital video platforms are getting more money from traditional TV budgets -- and more to come in 2012.

Break Media, the digital video ad network, says there will a 32% rise in digital video advertising dollars coming from TV budgets. But that won't be the biggest gain for the Internet overall. Overall organic advertising budget growth will rise 38%, with display budgets growing 45%.

“Video advertising spending is growing faster than expected, and this is the first time a significant portion of the increased resources devoted to it are coming from television budgets,” stated Andy Tu, vice president of marketing for Break Media.

One research estimate, from Forrester Research, says digital video advertising will reach $2.0 billion for 2011 and $5.4 billion in 2016.

Break says more than 90% of all advertisers plan to use video advertising networks in the coming year, and the ad nets' share of all digital video will grow to 41% from 20%.

All this has forced up usage in the cost per view (CPV) pricing formula -- as cost per view is offered more by content providers. It says CPV has grown to a 40% share. Still, many ad networks and/or publishers'  sites also still offer cost-per-thousand (CPM) and cost-per-click (CPC) pricing models.

For its annual digital video advertising trends survey, Break Media says such gains will be put onto the most rapidly growing areas like mobile, as well as those that provide advertising option formats for consumers.

The growth of mobile devices is a big part of this --  it has increased almost twofold in the past year and is expected to jump another 16% in 2012. The survey says while video ads come in a number of formats, most advertisers still prefer pre-roll.

Recommend (11)
2 comments about "TV Budgets Shifting To Video Ad Spend".
  1. Maarten Albarda from MLA Consulting LLC , December 16, 2011 at 3:20 p.m.
    I am glad the news is getting picked up... http://www.youtube.com/watch?v=uqka2Ykr6mc
  2. Doug Garnett from Atomic Direct , December 19, 2011 at 2:45 p.m.
    I don't like the Break study. It's another study clearly sponsored by someone who benefits from the specific outcome they trumpet as the results. However, they also don't investigate the significance of what they claim. When I've dug into the numbers, only 20% of companies have shifted ANY money. And we don't know if it's a significant amount or play money. So at this time, it seems to me that from the numbers, the best we can conclude is there's a huges hype machine driving video online arguments. But it's not yet clear if it offers a TV alternative or merely another shiny new bauble for the media buyers, creative team, and marketing department.