Digital Video Advertising Trends
Online video has moved out of Silicon Valley and across the globe. More and more, people are watching TV shows and movies on their laptops or the latest viral video on their smartphones. ComScore’s recent “Surviving the Upfronts in a Cross-Media World” report found that more than four out of five Internet users consume online video in a given month and that the number of Americans who watch online video in an average day has increased 30% in the past year. The firm also reported that one in every 10 tablet users are viewing video almost daily on their device.
With digital video advertising spanning across four screens -- computers, smartphones, tablets and connected TVs -- the potential for advertisers is enormous. In fact, NPD DisplaySearch’s Global TV Replacement Study revealed that 70% of people are now engaging with video content outside of the traditional TV set. To better understand how advertisers perceive this shift to multiple platforms, I’d like to highlight some of the findings from our annual U.S. and inaugural Germany advertiser surveys on digital video advertising attitudes in the U.S. and Germany. The reports uncovered digital advertising trends, along with advertiser perspectives highlighting key similarities and differences between the U.S. and Germany, which serve as a strong market indicator for Europe and beyond.
- The future is bright for online and mobile video. In fact, 30% of U.S. and 28% of Germany respondents expect online video to see the largest overall increase in media spending this year, while 20% of U.S. and 24% of Germany respondents expect mobile video to have the largest overall increase in media spending.
- Ad spend continues to shift from more traditional channels to online video. With 52% of the U.S. population and 82% of the Germany Internet population watching video, advertisers are taking notice and shifting ad dollars accordingly. More than 66% of U.S. and 40% of Germany respondents plan to shift at least a portion of their budget from TV to online video in 2012. Additionally, approximately one third of both U.S. and Germany respondents plan to shift between 20% to 40% of their display budget to online video this year.
- As online video advertising matures, advertisers are becoming more confident in its capabilities. The majority of respondents believe online video is equally or more effective than TV -- 64% of U.S. and 59% of Germany respondents, to be exact. However, taking a cross-platform advertising approach is the best way to reach audiences. A recent Nielsen Video Effectiveness report found that 29% of people exposed to both online video and TV ads recalled the message versus 19% for TV ads alone.
- Europe still trails North America in the number of RFPs that include online video. Sixty-two percent of U.S. respondents reported 40% or more of their RFPs included an online video ad component -- while only 25% of Germany respondents reported 40% or more of their RFPs included an online video ad component. Despite the fact that the majority of the German Web population watches digital video on a regular basis, online video spending in Germany lags significantly behind the U.S.
- A few barriers still exist before online video ad spending can continue to increase. Advertisers are willing to invest more in online video, provided they understand its value. In fact, 41% ofU.S. respondents believe that clearer ROI would increase online video ad spending. German advertisers are more concerned about pricing: 48% of respondents felt lower costs would encourage advertisers to allocate more of their ad budgets to digital video. Both countries -- 27% of U.S. respondents and 30% of Germany respondents -- agree clearer metrics will lead to a rise in online video ad spending.
As people from around the world increasingly integrate multiple screens into their everyday lives, advertisers recognize the immense opportunity for scalable, cross-platform digital advertising. Providing clearer ROI, clearer metrics and lower costs will ultimately propel the digital video industry ahead in both countries, enabling advertisers to reach people with digital video anytime, anywhere.