Video is an increasingly important format for content both in the mobile and desktop worlds. According to eMarketer, as of 2015, the average Internet user spent 1:55 hours a day watching online video, a higher amount of than that spent on social networks, listening to digital radio, and pretty much any other activity online. On some age groups, like younger millennials, now watch more video content on their devices (57%) than on TV (43%). And this makes sense, as online video can now be found on a multitude of sites, ranging from YouTube and Netflix, to news websites, and even social networks like Facebook, Twitter, and others. It is in this context that video advertising is soaring.
In the US alone, $9.9 Billion dollars will be spent on video ads in 2016, a figure which is expected to grow to $28.08 Billion by 2020. Moreover, video is becoming increasingly important in relation with other budget allocations. According to Cowen and Company, this year, video ads will account for 19.7% of all advertising on the web, which shows a significant growth from 17.7% in 2015. On the other hand, other types of digital advertising like search and display are growing slower.
Video ads, however, are changing. And the reason is that mobile is becoming an increasingly important platform for video viewing. A study done by eMarketer has shown that the average time users spend watching digital videos on smartphones has grown from 2 daily minutes in 2011, to 17 minutes in 2015. For tablets, this figure has grown from 1 minute in 2011 to 22 minutes last year. With an ever-growing mobile audience, video ads are becoming shorter and more engaging. This has to do with the nature of some of the channels where video ads are being displayed. Facebook, for instance, auto plays videos as users scroll down their newsfeed. If the video isn’t engaging enough, they will keep scrolling down. Something similar happens in Snapchat and other social networks. YouTube, which for now is the leading video advertising platform with over 39% of the market, has two options. Either users must watch an unskippable 15 seconds ad, or they are exposed to ads with no time limit, which can be skipped after 5 seconds. The first kind is more expensive, as it creates a captive audience, but the second requires the ad to hook up the viewers fast, or else they will be gone before the message is transmitted.
In this context, it is important to understand that video advertising’s purpose is not too different than TV advertising, albeit digital video ads are measurable and can be far better targeted. However, as we have learnt through Harrenvideo, Harrenmedia’s tool for video ad distribution, this tool’s main goal is to create brand awareness and positioning, as they rarely work to produce an instant conversion. For this reason, the most important metrics for these types of campaigns are “impressions”, which only indicates how many times the video ad has been loaded on a page or application, and “views”, which indicates how many times the user has viewed it. However, you should mind that the latter is not always so simple to interpret, as platforms like Facebook consider a view after the user has only spent three seconds watching the ad, a timeframe that often isn’t enough to understand the content.
2016 will be a great year for video advertising, as users will spend even more time consuming digital video on all platforms. And with the Rio Olympics being broadcasted not only on TV, but also on various digital formats, including online video, mobile apps, and even on Virtual Reality, video ad spending and consumption will grow. According to the Wall Street Journal, this massive event will add $2 Billion in advertising spending to the otherwise $577 Billion that will be spent on advertising throughout 2016. And while this represents roughly a 4,6% growth from 2015, Internet advertising will grow 16%, a big portion of which will be devoted to video ads.