Digital Video Advertising Growth

Video is continuing its march towards being the top digital advertising format, both on desktop and mobile, growing because of advertisers embracement of the format, thanks to the stronger impact compared to traditional ad formats. This is being reported in the latest BI Intelligence report about the state of digital video advertising. Marketers and advertisers are heavily expanding their video ad creation efforts to keep up with the demand from customers and to take advantage of the higher CTR of the video format.

Marketing dollars shift from display to video

Spending on online video ads is steadily growing, with a revenue of $5 billion from web and mobile-based video ads. The report states that this sum will grow to over $13 billion by the year 2020, making video the fastest growing ad format today. The biggest driver of this growth is, and will continue to be, mobile with a growth rate that is more than 3 times faster than the growth rate for video ads on desktops. It’s clear that marketers and advertisers are rushing to clinch video ad spots on mobile as video viewership is growing steadily on tablets and smartphones.

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Video perform better than traditional display ads

According to Google’s Rich Media Gallery, in February of 2015 video ads are routinely performing better than their counterpart, display ad units. The click through rates of video ad types such as pre-roll, mid-roll and post-roll, is 18 times higher than the click through rates of HTLM5 banner ads. The successful CTR of online video ads is driving higher costs for the advertisement format. On Instagram, video ads have an average CPM (Cost Per Mille) of $30 compared to $20 for photos. 

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Video on social is big business

In the latest few months, all of the big three social networks, Facebook (click here to see an infographic about Facebook’s mobile and video growth), Instagram and Twitter, have introduced new video ad features and products. The rise of better technology for advertisers on these social networks are the real growth enabler of video ads, giving advertisers major advantages including surgical targeting capabilities (to huge audiences) that can improve accuracy and audience reach, and analytics that far exceed anything they can get from TV ad spots. Sheryl Sandberg recently said something that should worry TV execs regarding Facebook’s impressive mobile and video growth:

“I think all marketers have the opportunity to do video, and that’s pretty exciting, including SMBs [small-to-medium businesses] who would never be able to hire a film crew and buy a TV ad. We’re seeing those put video in. Over 1 million SMBs have posted videos and done really small ad buys around them. And that’s pretty cool because I don’t think there are probably 1 million advertisers who have bought TV ads in that same period of time.”

– Sheryl Sandberg, Facebook COO


The bottom line is that digital video advertising is growing rapidly, much because of the added features and products of the major social networks and the high CTR nature of video. Video is here to stay and is poised to dominate the online advertising business during the next couple of years. If you want the full report you can buy the full report here.

Co-founder and Chief Strategy Officer at Shakr

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