Original Digital Video Ad Budgets Show a 68% Increase: IAB

Business is booming in online video advertising. The Interactive Advertising Bureau (IAB) reports that spending on original digital video advertising has jumped by 68 percent in the last two years, with those surveyed saying they spend an average of $4.7 million per year in the area. Agencies are increasingly steering money online, with 8 in 10 advertisers saying original digital video is an essential part of their media spending. The reasons are clear, as over 80 percent of video advertisers say they can reach viewers online that they simply can't reach through TV. They also believe online video offers them more prominent placing and branding. Why drown in a five-minute broadcast TV ad well when the same commercial can take up an entire ad break online?

The verticals with the largest digital video ad budgets are automotive ($6.4 million), telecom ($6.4 million), and household goods ($5.4 million). The increase in online video ad spend we're now seeing is largely coming form an overall expansion of ad budgets (for 44 percent for those surveyed) and taking from cable TV ad budgets (from 34 percent).

In 2018, 59 percent of digital ad budgets will go to desktop or mobile video. That's an increase from 55 percent in 2017 and 53 percent in 2016.

"Marketers' commitment to digital video—especially original digital video—has been skyrocketing over the past few years," notes Anna Bager, executive vice president for industry initiatives at the IAB. "These findings reflect consumers' enthusiasm for the dynamic storytelling which original video programming delivers in spades, and the power of the medium to deliver strong ROI."

This data comes from an IAB survey of 353 advertisers who work with sizable ad budgets. While targeting buyers and delivering return on investment (ROI) is important to advertisers, the survey reveals they're even more concerned with advertising on platforms with quality programming. In fact, quality of programming was the most important criteria for respondents when choosing a platform, edging out cost, audience reach, and quality of environment.

For more results, download "IAB 2018 Video Ad Spend Study" for free (no registration required).

Troy Dreier's article first appeared on OnlineVideo.net