Study: Original Digital Video Content Advertising Budgets on the Rise

In May of 2014, the Interactive Advertising Bureau (IAB) held their second annual NewFronts conference, coinciding with the release a multi part study indicating that (not surprisingly) 68% of marketers and agency executive will be increasing video ad budgets, with three out of four expecting original digital video programming to be as important as TV programming within the next three to five years.

Digital Video Ad Spending

The survey consisted of data taken from interviews with 297 buy-side executives who were responsible for at least a one-million dollars in ad spending annually. Two-thirds of respondents said that they will compensate for digital video budget increases by moving funds from traditional television ad budgets. Original video content accounts for much of the optimism.  The dramatic increase in online video viewership had executives revealing they plan to nearly spend half (48%) of their internet video budget on “made for digital” video programming in 2014, up from 44 percent in 2012.  Here are a few highlights from the study:

CPG and Retail marketers look to Original Content to drive engagement and brand loyalty. They use Original Content as a vehicle for communicating their brand’s personality or universe without necessarily selling products.

For Financial and Pharmaceutical categories, regulations limit brands’ latitude for the creative and more time-relevant content messaging used by other sectors.

When partnering with publishers to create custom digital video content, advertisers are looking to pay the distribution (media) costs only to avoid dipping into the less fluid Ad Production portion of the media budget (which typically covers traditional as well as digital media).

Some organizations are starting to set aside separate Content Marketing buckets within their larger Advertising budget to produce and/or procure digital content. These funds are being used for 3 rd-party content creators and aggregators as well as in-house content production.

Citing pressure to benchmark Original Digital Video ROI alongside other digital and traditional media formats, nearly all participants expressed the need for a better way to account for its “softer” metrics in their bottom lines.

Reach, Cost and Programming Quality are the first boxes advertisers check when evaluating various media partners, so it’s important to package appropriately in order to take more dollars (especially those formerly earmarked for TV) off the table

Source: IAB Research: Original Digital Video To Be As Important As TV

It has now been a year since this study was published.  It is safe to say that the video train has not been slowing in 2015.  As media continues to fragment, the traditional 30 second commercial is taking a back seat to original video content on the web.  Certain industries are obviously better cut out for developing content people would actually want to watch, but it is exciting and humbling to see the creativity of brands attempting overcome these challenges with engaging video content.