Commentary

IAB Study (Surprise!) Is Bullish On NewFronts

It’s hard not to make this sound like anything other than a commercial for NewFronts and digital advertising, but here goes:

A new study for the Interactive Advertising Bureau, done by Advertising Perceptions, claims 88% of advertisers increased their planned digital video budget after attending NewFronts last year.

But wait, there’s more.

Buyers and marketers plan to allocate 40% of their digital video budget at this year’s events, up from 37% the year before, which, in digital business terms does seem to be modest, but still, 40% is 40%.

Not coincidentally (at all!) the two-week-long NewFronts began this morning with more than 30 participating companies. A few companies have altered plans--opting at the last minute to hold private meetings instead. Yahoo and AOL, both becoming part of Verizon, pulled back this year as they regroup. 

Diving a little deeper four out of seven of the key sectors (automotive, food and beverage, financial services, etc.) allocate nearly half of their budgets for original video productions while they are at NewFronts.  They are blatantly solicited, right form stage. At this morning's New York Times NewFronts, it announced several new How-To special packages it had cooking, and then as much said, "Please sponsor them." 

Inch by inch, another chart shows, original video is gaining ground. In 2016, this survey says, 45% of spending on advertisers’ most important product or service was spent on new made-for-digital content. A 2% jump is forecast this year.

The IAB queried 358 respondents.nvolved with digital ad spending decisions. Of those, 47% were from agencies and 53% from marketers; 51% had senior titles, 19% had junior titles and the rest were somewhere in the middle. Some 85%  said digital advertising was their particular budget focus, and 14% said TV.

Sixty-one percent said they’ll increase spending on digital video advertising in the next year. Half said that will entail expanding budgets; 49% are taking from their broadcast TV spend, 42% from cable, 34% non-video online spending and and 32% from interactive TV spending.

This seems encouraging: While 23% of the respondents said they mostly use ads developed for TV in their online video advertisements, 26% use ads developed for both TV and digital purposes and 20% say they opt for separate creative executions for both places. Another 14% say they develop advertising specifically for mobile devices.

Native advertising accounts for 42% of the investment.

Anna Bager, IAB senior vice president and general manager for mobile and video, said the survey is proof the NewFronts, which some suggest have lost their luster (and some of its participants) is a “critical industry event where marketers and media buyers find inspiration and budget allocation happens—all driving further growth across the original digital video landscape.”

While this report gives a generally positive-to-positively-bullish spin to the digital video market, there are some caution signs: 37% say the quality of content is still an obstacle. But surprisingly (to me) is that 47% say that about television, which has had many more years to deal with that issue.

Likewise, I tend to think advertisers and marketers are far more confounded by the sheer mechanics of buying, blocking and viewability of digital ads compared to TV. This data suggests there’s plenty of confusion to go around for both ad mediums.

pj@mediapost.com

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