Monday, January 4th, 2016 | 8 min read
I know what you’re thinking. I’m thinking it, too.
Video advertising was definitely the Adele of 2015. That is, we all knew it was coming to take over the industry, but we didn’t realize just how much of a mark it would make. And now, as we begin the new year, there’s no escaping it: You either join the video revolution or get left behind.
According to BI Intelligence, digital video ad revenue will reach almost $5 billion in 2016, up from $2.8 billion in 2013. This shows that marketers are catching on to the many benefits of digital video: It helps brands stand out from the noise, capture consumers’ attention in a more visual way than text posts can, and sets them ahead of the curve as content incorporates more and more multimedia formats.
Oh yeah, and, most importantly, consumers love online video. As eMarketer projects, the number of US digital video viewers will reach 204 million, a 22 million increase from 2013. But online video doesn’t simply capture viewers’ attention; it provides significant benefits for the advertiser, too. BI Intelligence also reported that video ads have an average click-through rate of 1.84%—higher than any other digital format.
Still, advertisers can’t just blindly throw their money at video and hope it works. First, they have to understand the space, which evolved dramatically this past year and can only be expected to bring new opportunities in 2016.
So, let’s take a look at the biggest trends in video advertising today, plus how they’re expected to shape the landscape in the year ahead.
Increasingly, consumers are cutting their cable cords and flocking to digital video, either on mobile devices or through connected TVs like Apple TV and Roku. In fact, eMarketer found that US adults watched one hour and 16 minutes of digital video each day in 2015—up from just 21 minutes a day in 2011—while time spent watching traditional TV has been gradually decreasing for three years.
As a result, marketers aren’t just creating new budgets for digital video spend; they’re actually pulling money from TV budgets to fund online video ads.
According to AOL’s State of Video report, half of advertisers who increased their digital video spend took that money directly from TV budgets. Aside from the fact that consumers are embracing online video, another motivation behind this move is that the cost of TV advertising has increased by 29% since 2012. Meanwhile, the digital video space provides more affordable ad options.
For marketers, this means that competition in the online video space is heating up. As such, making the move from TV to digital won’t be enough to ensure engagement. Marketers will have to put their resources into creating high-quality content and distributing it on the platforms that are most popular among their audiences.
Emarketer found that consumers are increasingly using tablets (48%) and smartphones (56%) to view online video. Meanwhile, ZenithOptimedia forecasts that video consumption on these devices will grow by 35% in 2016.
As such, marketers are smartly focusing their attention towards reaching users on-the-go. According to AOL, mobile video ad spend saw a whopping 75% growth in just one year—skyrocketing from $1.5 billion to $2.7 billion.
So, where exactly do marketers spend their money? They’re embracing mobile apps such as Snapchat and Instagram, which provide opportunities for brands to sponsor in-feed video ads and publish branded content. They’re also tapping into Facebook and Twitter’s mobile ad formats.
Part of what’s so enticing about these platforms is their targeting capabilities. For instance, when Instagram opened its API to all advertisers, it also synced up its targeting options with those of its parent company, Facebook. Marketers can now create video and then target audiences based on age, location, gender, and interests. They can also upload their own data about buyers to create Custom Audiences.
Meanwhile, over on Twitter, marketers can target users who have likely seen their TV ads, making the transition from traditional TV to digital video that much smoother.
There’s no doubt about it: Autoplay is becoming the new norm for digital video. Just this year, Facebook made autoplay the default method for viewing videos, meaning that once you scroll past a video in your feed, it will play automatically without sound. And it wasn’t long before Twitter followed suit.
In June, the social network introduced autoplay video, stating that users are 2.5X more likely to prefer autoplay videos over other viewing methods. Twitter also found that brands saw a 7X increase in completions of Promoted Videos.
With Instagram, Snapchat, and YouTube also introducing autoplay capabilities, where does this leave marketers?
For one, it signifies that their videos must be engaging enough to stop users who are scrolling through their feeds. The first few seconds are critical—they need to capture the consumer’s attention; otherwise, viewers will breeze right past the video. Considering most videos autoplay without sound, advertisers must also ensure that their content doesn’t rely on audio to get the message across, at least not at the beginning of the video.
The advantages and disadvantages of programmatic ads have been hashed out ad nauseum. Programmatic is helpful because it automates the process of distributing ads to target audiences, saving time and money. However, marketers worry about the quality of these automated messages, as well as breaching consumers’ trust by pushing ad messages on them.
Still, the allure of programmatic is winning advertisers over. Earlier this year, AOL projected that 32% of all digital video ad spend would be bought programmatically in 2015, with that number expected to jump to 38% in 2016.
And Google, along with its video site, YouTube, is driving a lot of this momentum. According to comScore, YouTube is second only to Facebook when it comes to driving the most unique mobile visitors each year, meaning more and more marketers will look to set up ads there.
In response, it seems Google wants all programmatic buys to be completed through them directly, since it recently blocked third-party access to YouTube inventory.
Google also recently switched on programmatic options for its TrueView ad format, which has allowed marketers to buy ads that play before a YouTube video or ads that show up in video search results.
As more marketers venture into the video space—either by rolling out programmatic ads or publishing branded stories—it’s important to gather as much knowledge as possible about the platforms and content formats available. This way, you can get the most out of your ad dollars and be prepared to adapt to inevitable changes in the landscape.
For instance, with the US Presidential Election coming up, major social apps will be fighting to be users’ go-to place for news. We should expect platforms like Snapchat and Facebook to keep perfecting their video capabilities in an effort to offer the most compelling content.
Also, live-streaming apps Periscope and Meerkat burst onto the scene without much warning this year, and they could shepherd in a wave of new live-streaming outlets in 2016.
Essentially, with viewer attention shifting away from traditional TV and towards digital video, and with more advanced targeting options released every year, video is not a strategy that marketers can avoid for long. In fact, going into 2016, it should be a serious consideration for your advertising mix. Otherwise, your competitors will be off and running with awesome video while you’re left saying “hello” from the other side.