Ad agencies globally turning to video and digital formats

NEW DELHI: Around 48.3 per cent of ad agencies have said a majority of their RFPs (requests for proposal) included a video ad component in 2014, as against 38.1 per cent in 2013 and 30.2 per cent in 2012. The findings are part of a  survey by BrightRoll which claims that online video ads are becoming mainstream.


Agencies are turning to online video because they believe in its effectiveness. The survey found that 72 per cent believe that online video advertising is as or more effective than TV spots. Just 18 per cent see online video ads as less effective.

BrightRoll also found that 22 per cent of agencies plan to devote the majority of their digital video budgets to programmatic ad buys in the next 12 month – up from six per cent in last year’s survey.

“Programmatic video is going mainstream with agencies because it has proven to be effective in shifting consumer perception. Agencies told us they are investing with confidence, measuring consumer behaviour directly, and effectively engaging audiences across screens using programmatic video,” says BrightRoll vice president global marketing Guy Yalif.

The most important metrics for ad agencies are completed views (20 per cent), conversion (18 per cent), and brand lift (17 per cent). Click-through rates, once seen as key, are now less important, coming in fifth.

With mobile video viewing on the rise, so is mobile video ad spending: 79 per cent of respondents were likely or very likely to devote some of their video ad budgets to tablets, a rise from 68 per cent in 2014.

Meanwhile, another study shows around 28 per cent of marketers have reduced their advertising budget to fund more digital marketing.

In 2015, search engine marketing (SEM) will continue to capture the largest share of online spend at 47 per cent, or about 14 per cent of the firm’s total marketing budget 2014.

Worldwide social network ad spending reached $16.10 billion in 2014, a 45.3 per cent increase from 2013 that pushed social’s share of overall digital ad investment to 11.5 per cent. Combined social network ad dollars from North America, Western Europe and Asia-Pacific represented 93.7 per cent of global expenditure.

Spending on paid media in the US totaled $179.80 billion in 2014. Digital accounted for 28.2 per cent of total ad investments, with 10.6 per cent going toward mobile. Digital ad spending rose 17.7 per cent in 2014 and will rise another 15.5 per cent in 2015, fueled by mobile.

Digital ads will lead the way for global media growth in the next four years, accounting for 33 per cent of total advertising revenue, nearly catching TV in the process. TV advertising will generate $173.7 billion worldwide in 2014 and grow to $214.7 billion in 2018. During the same period, Internet advertising will grow from $133 billion to $194.5 billion.

Total entertainment and media spending on digital services is forecast to grow at a 12.2 per cent compound annual growth rate (CAGR) between 2013 and 2018 and account for 65 per cent of global entertainment and media spending growth, excluding spending on Internet access.

By 2018, Internet advertising will be poised to overtake TV as the largest advertising segment. As recently as 2009, Internet advertising revenue was $58.7 billion and TV advertising revenue was more than twice as big at $132 billion. But Internet advertising revenue will rise at a 10.7 per cent CAGR to reach $194.5 billion in 2018, just $20 billion behind TV advertising.

Two-thirds of revenue growth from consumers and advertising will be digital. Of the $241 billion growth in total entertainment and media consumer and advertising revenue from 2013 to 2018, $157 billion will come from digital sources.

Marketers spent $4.4 billion on mobile advertising in the US in 2012. That figure doubled to $8.5 million in 2013; and that figure is projected to quadruple to $31.1 billion by 2017. Search advertising accounts for about half of the total.

Just one per cent of all US advertising spending is on mobile platforms, compared to 43 per cent for TV and 29 per cent for print.

More than 40 per cent of US marketing professionals said they increased spending on data-driven marketing in the first quarter of this year, compared with 38.4 per cent who said the same in Q4 2013. More than 40 per cent of US marketing professionals said they increased spending on data-driven marketing in the first quarter of this year, compared with 38.4 per cent who said the same in Q4 2013.

Digital marketers spend almost as much to keep buyers (45 per cent) as they do to gain new ones (55 per cent).

Meanwhile, US marketers spend an average of 2.5 per cent of their total company revenue on digital marketing activities, according to a new report by Gartner Inc. US marketers spend an average of 2.5 per cent of their total company revenue on digital marketing activities, according to a new report by Gartner Inc.

According to Duke University's CMO Survey, digital marketing spending is forecast to grow by 10.2 per cent, a slower rate than the 11.5% increase forecast in August 2012, but a healthy rate nonetheless.

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