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6 Key Takeaways From The Video Industry in 2015

by Claire Reilly on November 23, 2015 , No comments

2015 has seen a huge surge in digital ad spend. In the US alone, this figure has risen from $50 billion in 2014 to $58 billion in 2015, and fuelling most of the growth is… video!

By 2019, digital video ad spend is expected to reach over $13 billion in the US, as advertisers continue to transfer their linear investment into mobile video and programmatic. These are exciting times in the world of online video, but what are the key takeaways from 2015 and where do potential obstacles lie? We examine AOL’s State of the Video Industry Report.

1. Digital is Cannibalizing Linear Ad Spend

As viewers continue to enjoy content across devices, advertisers are looking to unlock the full potential of digital video. This has had a massive knock-on affect on traditional TV ad spend, with 9 in 10 buyers shifting ad dollars from linear to digital platforms.

2. Mobile Video Growth is Surging

According to Ericsson, there are now as many mobile subscriptions as there are humans on Earth. Mobile video shows 75% growth since 2014 and is forecast to grow at 55% annually through 2021. Advertiser’s mobile ad spend has increased 18% since last year and publishers are seeing on average 24% of total revenues coming through mobile.

Mobile does not come without its difficulties, mainly measurement and creative strategy. As advertisers continue to struggle to track mobile performance, universal IDs are paving the way to an efficient cross-device measurement system.

3. Programmatic Data is Becoming Currency

By the end of next month, 32% of all digital video ad spend will be bought programmatically. Though agencies are buying more frequently than brands, everyone is realizing the benefits of being able to target the right person at the right time through automation. 88% of publishers are now selling inventory programatically to keep up with demand and 41% plan to increase their programmatic sales over the next year.

Still there are bottlenecks, with a lack of premium video inventory available, the human element to content quality control becomes ever more evident as manual processes are implemented.

4. Synergizing Linear and Digital Systems

With the ability to now measure return on ad spend in television, programmatic brings the benefits of digital video into the linear space. 41% of advertisers intend to use programmatic TV in the next year, up threefold since 2014 due to enhanced targeting and measurement of interaction with consumers. However, a lack of technology integration, data and transparency currently hinders the true power of programmatic TV.

5. CTR is the Metric of Choice

Much of the industry’s current difficulty revolves around establishing a uniform metric to best measure performance. Click through rate stands as the preferred method of choice followed by quality scores, impressions and reach, brand lift and completion rate and lastly, cost per engagement and GRPs. CTRs do not however, give consideration to the emotional resonance achieved through branded video.

6. Branded Video is Worth Figuring Out

Brands working with content creators on creating branded video is on the rise, slowly but surely. Advertisers want to deliver an emotional experience to consumers and are moving linear ad spend into digital in order to achieve this. Slow growth is due to high costs involved and conflicting ideas between marketer and content creator on the extent of brand messaging. Again, the issue of measuring performance arises as emotional responses cannot be captured through digital analytics. Companies such as Viacom and NBC Universal are now attempting to measure such responses through neurological experiments at their purpose built labs.

2015 has been a monumental year for online video, with mobile video and programmatic being hot spots for activity. Consumers are engaging with sight, sound and motion everywhere, forcing advertisers and publishers to establish new targeting practices. The ultimate goal from 2016 onwards is to create an automated system that can target, measure and track data in a multi-device ecosystem. Within that environment, the availability of premium quality content will be of the utmost importance.

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Claire Reilly6 Key Takeaways From The Video Industry in 2015