Digital Video Ad Spend to Increase 22 Percent

A new IAB study conducted by Advertiser Perceptions, An Inside Look at Demand-Side Perceptions of Digital Video Advertising, found 69 percent of marketers and 55 percent of agencies plan to increase their digital video advertising with 22 percent growth predicted in the next 12 months. Those surveyed project they will spend 17 percent of their total online display advertising budget on digital video advertising in the next 12 months.

Key findings of the study:

- Advertisers are finding that their audiences respond better to DVA, with consumers showing a higher engagement rate with online video.
- DVA (digital video advertising) is more trackable and targetable and DVA production is less expensive, making it more cost efficient.
- Marketers will migrate TV ad dollars to digital video based on the belief it will deliver better ROI; agencies and television decision makers will shift ad dollars in an attempt to follow their target audiences.
- Among the different available DVA formats (pre-roll, in-banner, expandable banner, mobile video, rich media overlay and post-roll), agencies primarily use pre-roll while marketers are not committed to any specific format. Most respondents believe the appropriate length is 15 seconds.
- The preferred pricing model is CPM.
- A majority of marketers and a majority of agencies believe they should each be responsible for deciding whether to use DVA and how much budget to allocate to it.

Of the study, IAB SVP Sherril Mane said, "The study substantiates the buy-side appeal of digital video advertising - the power of sight, sound and motion paired with interactivity. This bodes exceptionally well for the future revenue growth."

Advertiser Perceptions President Randy Coheen added, "There was strong consensus that demand for digital video advertising was strengthening. It was described best by a senior agency buyer who stated that 'Digital video is becoming an ever-more common way that our target is consuming what was traditionally broadcast content - and our target is spending more time online, and video is another way to reach and engage the target.'"