Marketing teams will increase their digital video budgets nearly 25 percent to $18 million in 2019, according to a new report by the Interactive Advertising Bureau (IAB). While brands call original digital video content (ODV) “essential,” ensuring the quality of this content presents a challenge.
IAB’s Video Advertising Spend Report 2019 explores the spending plans of 350 marketer and agency executives, 17 percent of which representing direct to consumer (DTC) brands. Respondents had to be involved in digital video advertising decision-making at a company responsible for at least $1 million total ad spend in 2018 and have familiarity with the Digital Content NewFronts.
Sample groups represented the automotive, consumer packaged goods (CPG), fashion/apparel, finance, home furnishings, media/entertainment, retail and telecommunications industries.
Video ad spend has grown across all the aforementioned industry verticals but none more so than in Media/Entertainment, which will increase its ad spend by an estimated 75 percent this year. The next-highest estimated increase will come from Fashion/Apparel at 45 percent compared to spending in 2018.
Despite its small representation among those surveyed (17 percent), direct to consumer (DTC) brands expect to allocate more than half of their digital spend on digital video advertising. This is a 50 percent YoY increase. About half of this budget will be spent during Digital Content NewFronts, marketers said.
Nearly two-thirds of respondent budgets have been allocated to digital video, IAB found. A majority of that spend is allocated outside of social channels as brands invest in music video sites, user-generated content, online TV shows and others.
IAB notes that seven out of 10 digital video advertisers currently use influencers in their digital video advertising. Four out of 10 plan to increase spending this year on influencer partnerships.
Spending on original digital video content (ODV) will rise 31 percent year over year to $9.3 million. Respondents said they consider ODV to be “essential.” While “quality of content” remains the main deciding factor for investment, it is also listed as marketers’ biggest obstacle for ODV.
Brands will adopt new digital video ad formats at a higher rate in 2019, IAB predicts, especially stories and shoppable ads. Over half—59 percent—plan to increase their spend on advanced TV (ATV) over the next 12 months, with half reporting increases in OTT.
Audience reach and campaign optimization were chosen as top benefits of advertising on OTT, with “cost” as its biggest obstacle.
Digital video programmatic spending is expected to rise four percent YoY and reach 53 percent fo buying methods. DTC brands allocate more funds to programmatic in-house buys than their incumbent counterparts, IAB noted.
A majority of respondents (83 percent) agree that a unified multi-platform buying solution across TV and digital video is “extremely/very important.”
“This year’s report clearly points out that buyers are looking for more unified approaches to planning, executing, and measuring video campaigns across platforms,” said Eric John, deputy director of IAB Digital Video Center of Excellence. “The more the industry pivots to make good on the promise of ‘video everywhere,’ the more we can expect digital video budgets to increase.“