Since the rise of YouTube, video sharing sites have become a pillar of our modern culture. The ability to instantaneously share not just words, but videos, images and testimonies has been embraced by everyone from children to news reporters and politicians. Netflix has replaced Blockbuster as most viewers’ primary film outlet and, for many, streaming sites such as Hulu have replaced traditional television. Services such as Vevo work through partnerships with high-end advertising clients to attach mandatory ads to the world’s most popular music videos. Hulu takes a similar approach, but allows consumers to select an ad from a series of options before and during each program that they view.
These sites have completely redefined the way in which a viewer absorbs visual media, and the advertising world has taken note. Digital video advertising represents an ever-increasing share of the advertising experienced by the average consumer and, according to recent studies, it’s working like nothing else.
In the past 5 years alone, the percentage of the US population watching digital video has jumped a staggering 20 percent, from 38 percent in 2008 to 58 percent in 2013. This rapid uptick is indicative of the enormous potential for growth that the digital market holds. As many consumers have abandoned traditional television broadcasts in favor of DVR recordings, in which advertisements can simply be skipped, the advertising world has adjusted accordingly, spending 72 percent more on digital video advertising over the past fiscal year, compared to a 3 percent overall increase in ad spending. Digital video spending is expected to reach $4.14 billion by the end of the year, and there is no reason to think that these increases will slow down any time soon.
Statistically, this enormous reallocation of funds is a very good move on the part of ad agencies. Surveys show that Internet video ads are becoming more effective than TV ads, with consumers having an almost 20 percent better rate of recall for online ads and an almost 25 percent rate of brand recall. This is due, in part, to the amount of time people spend watching the ads. On average, people that stream online video watch ads for 20 seconds and 87 percent complete them fully. When consumers, as previously mentioned, have the option to skip right through the ads on their TV to get to programming, these numbers represent an enormous boon for advertisers.
Online video advertising also represents an opportunity to reach consumers where traditional video advertising never has: on the go. By the end of 2013, there will be more mobile devices in use than people on the planet Earth, and Internet traffic is redirecting itself accordingly. More than half of video traffic in 2012 was for mobile video, and this number is only projected to increase.
Interestingly, digital marketing has the greatest effect on mobile purchases as well. Although traditional forms of marketing still work to generate demand in many large categories, digital marketing has played a large role in the meteoric rise of smartphones and other mobile devices. The increase in mobile viewing rates and, consequently, overall online views is directly correlated to the success of mobile digital marketing. Up to 82 percent of advertisers have embraced mobile as a force to be reckoned with and a “viable complement to TV broadcast and online video.” Mobile is growing much faster than traditional desktop advertising as well, with agencies sacrificing traditional standbys like banner ads in favor of increased spending on mobile, at a rate of 112.4 percent for mobile advertising to 35 percent for desktop digital advertising.
As the digital age dawned, the entire consumer experience shifted radically. For the most part, ad agencies have kept up, placing an increasing emphasis on marketing techniques such as digital video advertising. As these changes redefine the media experience, they will come to redefine the nature of modern business.
[Sources: PRNewsWire, Adweek, eMarketer, Vevo, BrightRoll, VideoNuze]
Infographic by Carlos Monteiro