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Digital Ad Spend 2022: What to Expect

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At a time when more people are working from home and online than ever before, local advertisers are gravitating towards digital as a way to reach consumers. This was already a growing trend, along with the on-going focus on brand safety, and while ad budgets were stretched in 2020 following the arrival of COVID-19, digital has become an important part of any advertising strategy. 

BIA Advisory Services predicts that digital spend will reach $76.8 billion for local advertising alone, a notable jump over the 2021 estimate of $64.7 billion. Worldwide, PQ Media anticipates that the final 2021 ad and marketing spend tallies will show a 7.2% rebound, followed by 7.6% growth in 2022. This is no accident – the data show that digital is here to stay. In fact, the aforementioned BIA Advisory Services report reveals that local mobile ad spend will surpass direct mail for the very first time. And with a growing number of consumers using their mobile devices to watch content, digital video ads will continue to rise in prominence, creating new ways for publishers to serve advertisers. 

That’s just the beginning, however – 2022 will bring additional evolutions that will impact the months and years ahead. Let’s take a look at what’s changing and what it means for digital advertising. 

Digital Video Is on the Rise. Are You Prepared? 

OTT video grew exponentially in 2020, a year in which most people stayed home, avoided large gatherings, and found solace in front of streaming video content. According to PwC, more than $12 billion was added to the market in 2020 alone, and total OTT video revenue could reach $94 billion by the end of 2025. This would account for 60% growth over a five-year period. 

On average, cord-cutter spend $85 on streaming video services every single month. As prices increase, as new entrants arrive, and as their favorite shows retire, they may reconsider these expenditures and turn to free, ad-supported options. Several already exist, providing everything from TV and movies to music and breaking news, along with a cornucopia of unique content not available anywhere else. 

All told, the increase in global streaming video views corresponded with pandemic living. Researchers found that overall device usage increased by five hours, rising to as much as 17.5 hours per day for heavy users, and an average of 30 hours per week for everyone else. Younger adults averaged 8.8 hours daily, while older individuals (those above age 65) spent an average 5.2 hours glued to their screens every day. Thus, the opportunity for advertisers is vast but must be navigated with a sure hand in order to truly break through and surpass competitors. 

Breaking Through the Noise of a Crowded Market 

Great ad-supported content must be paired with the right technology to ensure every ad is personalized through contextual marketing. This may sound complex, but technology makes it quite simple.

In short, contextual ads succeed by matching the theme and relevancy of the displayed content. By relying on artificial intelligence (AI) and machine learning (ML), video content can be deciphered from both video and textual classifiers, empowering publishers to pair content with the most relevant ads. Brand safety, or as some say, the caliber of the content, in which ads are paired with is being analyzed and criticized more than ever. Video platforms such as TikTok continue to update user guidelines to manage this problem, but we’ve found that working with established publishers is key.

Machine learning can also keep an eye out for visual signals, such as food trends, and determine that the video covers more than one category. This allows publishers to improve their accuracy in displaying ads that properly match the content, and ultimately provide a relevant promotion that resonates with viewers.

Video Advertising Challenges 

The year ahead will not be easy – even if collective ad spend returns to 2019 (pre-pandemic) levels, businesses will be cautious in how, when and where they allocate ad dollars. There are also concerns about other COVID-19 variants, which may encourage people to stay home. While that might have a positive impact on video views, it may discourage some advertisers from opening their wallets, particularly those selling services or experiences that cannot be enjoyed at home.

With these challenges in mind, publishers will need the right technology and platform to bolster their advertising efforts. They’ll need a system that highlights their benefits over their competitors—one that provides clear differentiators, especially those that focus on context.  

Integral Ad Science (IAS) has conducted numerous studies on the topic and found that 70% of consumers think contextual advertising relevance is at least somewhat important. Ad context increases memorability by as much as 76%, and 80% of those surveyed say relevancy impacts their perception of the brand being promoted.

Achieve Contextual Relevance Every Time 

Digital video is growing in importance and prominence, becoming the de facto method for most of our content consumption. While traditional TV is still here, it does not offer the anywhere access, ease of use, or on-demand functionality provided by digital video. Publishers are taking notice, but they can't go in with the same plan used for conventional video. They must instead deploy an advertising strategy that revolves around context to ensure that viewers receive the ads they want—those that are most relevant to the content they are watching—every single time.

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