Digital Video Ad Spend Is Accelerating

Digital video advertising revenue is moving at a rapid pace, with mobile video leading the way.

That is according to the Interactive Advertising Bureau’s Internet Advertising Revenue Report for the first half of 2018, which was produced by PwC and released by the IAB Tuesday.

The report found that video advertising revenue hit $7 billion in the first half of 2018, up 35% from the first half of 2017. 

“This is nearly double what it was just two years ago,” IAB research director Kristina Sruoginis said during a presentation outlining the findings. “That video growth should be no surprise to anyone paying attention to the space.”

Perhaps most notably, mobile video accounted for 60% of the video ad revenue, up 61% year over year and accounting for $4.2 billion of video ad spend.

“Last year, it was about 50/50 [desktop and mobile],” PwC partner David Silverman said during the presentation.

“As consumers are shifting their focus from a desktop screen to a mobile screen, marketers are following with their budgets,” Silverman added. “I don’t think of it as cannibalization, marketer are evolving to reach consumers on the device they are on.”

The IAB and PwC estimate that some 220 million Americans stream video each month, totaling 47 billion video streams per month, on average. The organizations also estimate that video CPMs are up 5% year over year, averaging $25.63.

One area the report did not delve into was trends around over-the-top video and advanced TV. Silverman says they are tracking ad spend on that format and may break it out for the full-year report to be released in six months or so.

“OTT is a hot topic. Right now, it is included in the survey, but we haven’t really bifurcated it from overall video,” he says. 

The IAB and PwC project that digital video growth could be further fueled by the rollout of 5G internet, as well as “innovative formats and new pricing models, including premium placements and ad campaigns capable of running across an expanding universe of screens.”

The full report is here.

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