Online Video Advertising Taking Heavily From TV Ad Budgets: AOL
Advertisers are shifting more money to online video. Increasingly, that money is coming from their TV ad budgets.
AOL released its 2015 State of the Video Industry report today, and it shows an ad industry rapidly moving to online video and programmatic buying. AOL surveyed nearly 300 brands, agencies, and publishers to get its data. This year, 39 percent of buyers said their increased digital video ad spending was coming from their broadcast TV budgets. In 2012, only 18 percent said that.
Additionally, 31 percent said they were taking from cable TV budgets and 31 percent from display ad budgets.
“Year-over-year, television remains the fastest growing source of digital video ad budgets,” the report notes.
One reason advertisers are looking for TV alternatives is that the cost of TV is rising: TV ad prices have grown by 29 percent since 2012. Advertisers are looking to online video ads to create “device-agnostic” ads, the report says.
AOL found that nine out of ten buyers were moving budgets from linear TV to digital. For marketers shifting budget from TV to online, 88 percent are moving the money to online video ads, whether for desktop, mobile, or over-the-top (OTT)
“This year, half of all buyers who raised digital video spend borrowed from existing TV budgets,” says JoAnna Foyle, AOL’s senior vice president of client services and operations. “What we’re seeing is a shift that will only mature and grow bigger in the years ahead. As viewers fragment across screens and advertising technology evolves, more marketers are beginning to realize the full potential of what digital video has to offer. Buyers are turning to it to address the need for device-agnostic, measurable content consumption. They also want to explore alternatives to the cost of TV advertising, which has increased over the years, but continues to challenge in terms of understanding tangible ROI.”
Download the full report, State of the Video Industry 2015, for more, including stats on the growth of programmatic ad buying (registration required).
What about the current mess of player types, lack of standards, and constant buffering do video publishers and advertisers think is good?
Advertisers are working with online publishers to create branded videos, where brand mentions are brought into the content. To work, the results have to pass the "sniff test."
AOL Build, a live celebrity interview show, is getting a public-facing street level studio in Manhattan's Greenwich Village this fall.
AOL continues the build up of its One by AOL advertising offering with a suite of modular products for selling inventory and monitoring performance.
The streaming service will launch on iOS and Android on Thursday, providing a millennial-oriented, mobile-first take on OTT video.
With fewer people watching broadcast television, broadcasters have had to increase ad loads to generate revenue. But then ad impact is diluted.
In a move few saw coming, Verizon will purchase AOL in an all-cash transaction. Attracting mobile viewers and advertisers is a chief reason why.