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Online Video Advertising Taking Heavily From TV Ad Budgets: AOL

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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).

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