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Nearly 60% of Advertisers’ Digital Budgets are Allocated to Video, a Steady Rise Since 2016, According to IAB Research

9 in 10 Advertisers Say Original Digital Video Programming Is Critical to Media Plans & Spend on the Medium is Projected to Rise by 68% Between 2016 and the End of the Year

NEW YORK, NY (April 30, 2018) —Fifty-nine percent of marketers’ digital advertising budgets are currently allocated to digital video, a consistent climb in share since 2016, according to the “Digital Content NewFronts: 2018 Video Ad Spend Study,” released today by the Interactive Advertising Bureau (IAB). Furthering the trend, more than 50 percent of buyers plan to increase digital and mobile video spending in the next 12 months, with the additional spend primarily coming from expanding budgets. These advertisers will hike spending on digital video, and mobile video by 53 percent compared to two years ago, to an average of more than $10 million annually. Investment in original digital video (ODV) programming has also been climbing steadily since 2016 and is expected to surge up to 68 percent by the end of 2018.

Findings indicate that advertisers across all sectors highly value ODV, with automotive and telecom being the biggest spenders, and health and beauty generating the biggest uptick in spend over the course of the last three years. Nearly 9 in 10 advertisers agree that ODV programming is an essential part of the marketing mix, with a majority saying that the medium allows for more prominent placement and branding, in addition to reaching audiences that are unavailable through linear television.

The research also confirms the importance of the NewFronts to brand marketers and media buyers, with 81 percent reporting that they increased their ODV budget as a result of attending last year’s marketplace. Nearly 4 in 10 said that they allocated more of their budget than planned after the 2017 event. At this year’s NewFronts, buyers say quality of programming will be the top driver in allocating funds in 2018, with attractive costs/CPMs coming in a close second.

“Marketers’ commitment to digital video—especially original digital video—has been skyrocketing over the past few years,” said Anna Bager, Executive Vice President, Industry Initiatives, 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. There is no question that we will see buyers out in full force throughout this week’s NewFronts presentations, as they look to invest more and more of their budgets in the latest original digital video programming opportunities.”

Other key findings:

  • 83 percent of advertisers believe that cross-platform measurement has improved compared to one year ago
  • Half of buyers plan to spend more on social media video advertising in next 12 months
  • 44 percent of advertisers report strong interest in buying interactive ads on connected TV
  • Nearly half (48%) of buyers plan to invest in voice artificial intelligence advertising in the next 12 months, with 44 percent saying the same about virtual reality

To download the complete “Digital Content NewFronts: Video Ad Spend Study 2018,” please visit iab.com/video-ad-spend.

Methodology
The research was conducted by Advertiser Perceptions, which surveyed 353 marketer and agency executives online from March 6 – March 16, 2018. To qualify, these executives needed to be involved in digital video advertising decision-making at a company responsible for $1M+ total ad spend in 2017. More than half of the participants (52%) were senior level (VP+ job title).

About IAB
The Interactive Advertising Bureau (IAB) empowers the media and marketing industries to thrive in the digital economy. Its membership is comprised of more than 650 leading media and technology companies that are responsible for selling, delivering, and optimizing digital advertising or marketing campaigns. The trade group fields critical research on interactive advertising, while also educating brands, agencies, and the wider business community on the importance of digital marketing. In affiliation with the IAB Tech Lab, it develops technical standards and best practices. IAB and the IAB Education Foundation are committed to professional development and elevating the knowledge, skills, expertise, and diversity of the workforce across the industry. Through the work of its public policy office in Washington, D.C., IAB advocates for its members and promotes the value of the interactive advertising industry to legislators and policymakers. Founded in 1996, the IAB is headquartered in New York City and has a San Francisco office.

IAB Media Contact
Laura Goldberg
347.683.1859
[email protected]