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Break Media Video study 2012-12-8


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Marketers Slicing from TV Budgets for Online Video in 2012

Brace yourselves, TV networks. About two-thirds of marketers say they’ll increase their budgets for online video advertising in 2012, and some of them will be snagging that money from the TV ad budget.

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Break Media Video study 2012-12-8

  1. 1. Digital VideoAdvertising Trends:2012An annual study examining growth indigital video advertising Distribute Create Activate
  2. 2. About the Study Executive Summary Digital video advertising is growing strongly with Forrester predicting U.S. online video ad spend will reach › Nearly 3 in 10 advertisers spent more than they planned on video ads in the past 12 months. $5.4 billion by 2016 (from $2.0 billion in 2011). As audiences flock to content offered by digital video › In the coming year, 68% of advertisers will increase the share of online display advertising devoted to video ads—from 27% to platforms, marketers are increasingly under pressure to find and reach this new breed of consumer by 35% of their online display budgets. utilizing innovative technologies, tactics and creative executions. As such, video“ › Advertisers increasing spend in the next year say the dollars will come from non-video display budgets (45%), overall advertising advertising has become a driving force behind the ongoing metamorphosis of the Break Media budget growth (38%), and television budgets (32%). digital media landscape. partnered with › Awareness of individual video advertising networks (VANs) has increased dramatically in the past year with a concurrent market research increase in usage; 73% now use VANs compared to 65% last year.leader Advertiser Break Media partnered with market research leader Advertiser Perceptions Inc. for its › Over 90% of advertisers plan to use VANs in the coming year and increase the share of spend placed with these entities, from Perceptions Inc. second in-depth study of digital video advertising. Our goals were to look how advertis- an average 20% to 41% of total video dollars. ers planned video ad spend in 2011 compared to their actual spend, what formats › VANs are viewed as strong in the areas of Reach, Campaign Performance, Targeting, Creative Optimization, Cost, Reporting and practices are growing, and how and where advertisers plan to place video ads the next 12 months. Tools, ROI Metrics and Innovative Video Ad Formats. VANs weaknesses are viewed as publishers strengths—Content, Inventory Quality, Client Service and Inventory Transparency. The past few months has produced a wealth of studies on the video ad industry. Each focuses on a › Use of mobile, full-screen expandable banner, videostitial and ad selector formats increased two-fold in the past year; mobile, ad different aspect of the industry including how advertisers use digital video in their overall advertising selector and TV box formats are slated for big gains again in the coming year. strategy, how publishers partner with video advertising networks to better monetize inventory, and how › Advertisers continue to be strongly wedded to pre-roll preferring it by a 3:1 margin over the next most favored format. advertisers view television ads vs. digital video ads. We’ve chosen to focus on larger trends affecting the › The pricing models available for video ads are equally preferred by advertisers, yet Cost per Thousand (CPM) and Cost per Click video ad industry and how tastes and preferences are changing the advertising world. (CPC) are the models most often offered. › Use of Cost per View (CPV) increased two-fold in the past year to 40%, but many say they did not use CPV because it was not We hope you find this study useful heading into 2012 and look forward to hearing your feedback as well offered by the publisher or VAN. as the opportunities and challenges you face in the digital video space. › Advertisers rank Difficulty Measuring ROI, Lack of Standardized Metrics, Not Enough ROI, and Lack of Transparency equally as the greatest hindrances to use of video. Transparency was not cited as an issue in last year’s study, and its rise in importance most likely results from increased use of VANs.1 2
  3. 3. Spend Grows Faster Than Expected Advertisers’ spend on video ads appears to be growing much faster than last year’s study indicated, with nearly 3 in 10 advertisers spending more than planned in the past 12 How did actual spend 29% SPENT MORE 57% SPENT PLAN 14% SPENT LESS“ on video ads compare months. In the coming year, 68% of advertisers will increase the share Nearly 3 in 10 to planned spend? of online display advertising devoted to video ads with the Homeadvertisers spent Furnishings, IT/B2B, Alcohol, and Womens Apparel sectors showing more than they higher growth compared to other sectors. Advertisers increasing theirplanned on video video ad spend in the next year say the dollars will come not just from non-video display budgets (45%) and overall advertising budget growth (38%), but also from television budgets (32%). Dollars for increased video spend to come from… Video Share of Online Display Budget 27% 35% 45 % 38% 32% 25% 16% 5% 4% NON- SOCIAL ONLINE TV ADVERTISING MEDIA 2011 2012 DISPLAY AD BUDGET PRINT/ SEARCH GROWTH OUTDOOR3 4
  4. 4. Video Ad Networks Have VAN Strengths Joined the Party Reach Campaign Performance Last year we found moderate awareness of even the largest video ad networks Spend with VANs 201 2 Targeting 2 01 (VANs). What a difference a year makes, with awareness of these entities 2 11 Creative Optimization“ having grown two-fold in some instances. Use also has 2012 20 8% Cost/Price 92% grown with 73% now using VANs compared to 65% last 2011 Next year 92% of 27% Reporting Tools year. Next year 92% of advertisers plan to use VANs and advertisers plan 20 ROI Metrics increase the share of spend placed with these entities from 41 11 to use VANs 73% Innovative Video Ad Formats an average 20% to 41% of total video dollars. Larger than 20% % 0 2 01 35% average increases are expected from the Home Furnish- ings, IT/B2B, Pharma, and Travel sectors. Increased use of VANs appears to be 201 0 motivated by their greater range of strengths compared to publishers. % WHO WILL NOT USE VANS % WHO WILL USE VANS 65% 159.1 Million IN A SINGLE SPENT WATCHED MONTH people in the US 3.2 Million minutes 7.5 Billion ads (that’s 50 per person) 80 + % Of Which Ran through VANs5 6
  5. 5. Video Ad Formats Used / Plan to Use USED 2011 PLAN TO USE 2012 Pre-roll Has Competition 62% But Still Takes the Crown PRE-ROLL 39% 63% MOBILE 55% The past year saw almost two-fold increases in the use of mobile, PRE-ROLL full-screen expandable banner, videostitial and ad selector formats. Use 59%“ IN-BANNER of these formats will continue to gain again in 2012 53% Advertisers are based on advertisers’ plans. But as we found last EXPANDABLE BANNER 47% 31strongly wedded year, advertisers are strongly wedded to pre-roll (PARTIAL SCREEN) 47% to pre-roll % preferring it by a 3:1 margin over the next most RICH MEDIA 38% favored format. OVERLAY 45% EXPANDABLE BANNER 37% (FULL SCREEN) 43% IN-BANNER 10% AD SELECTOR 18% 33% VIDEOSTITIAL 28% EXPANDABLE BANNER 33% 7% (PARTIAL SCREEN) 24% 9 MID-ROLL 29% % 27% POST-ROLL RICH MEDIA OVERLAY 8 % 8% 25% 29% IN-TEXT 26% AD SELECTOR MOBILE 12%7 CONNECTED TV 8 24%
  6. 6. Advertisers Can’t Always Get What They Want Pricing Preferred vs. Pricing O ered Pricing models for video ads offered to advertisers do not necessarily match their PRICING USED PREFERRED PRICING preferences. The various pricing models available for video ads are equally“Some did not use CPV because it preferred by advertisers, yet Cost per Thousand (CPM) and Cost per Click (CPC) are the models most often offered. Although use of Cost per View (CPV) increased two-fold in the wasn’t o ered past year to 40%, many say they did not use CPV because it was not offered by the publisher or VAN. 69% 80% 53% 60% 40% 34% 25 % 37% 40% 21 % 20% 19% 18% 17% 16% 8% COST PER ACQUISITION COST PER ENGAGEMENT COST PER THOUSAND COST PER VIEW COST PER CLICK COST PER DAY / ROADBLOCK9 10
  7. 7. VIDEO ADS IN CONTEXT Inventory Transparency Hindrances to Use of Video Ads Video Ads Are Deployed With… Now an Issue Difficulty Measuring ROI stood out above all others last 42% 40% 67% NON-VIDEO 48% TV 40% STAND-ALONE 36% SEARCH ENGINE 28% PRINT/OUTDOOR year as the strongest hindrance to use of video ads. This“ DISPLAY CAMPAIGNS MARKETING year it ranks equally with Lack of CTR and actual Standardized Metrics, Not Enough DIFFICULT TO LACK OF TV No Longer the Neighborhood Bully TRANSPARENCY ON sales are top ROI and Lack of Transparency. The MEASURE ROI AD PLACEMENT success metrics rise in Transparency as an issue TV SHOWS GENERAL NEWS most likely results from greater use MOST PREFERRED POP CULTURE ENTERTAINMENT NEWS of VANs, which are perceived as weak on this characteristic. Advertisers may be frustrated with metrics because they view click-through rates (CTR) as a success measure of equal value to actual product sales 38% 35% SECONDARY PREFERENCES BUSINESS/FINANCE WEB ORIGINALS SOCIAL MEDIA CONSUMER-GENERATED TECHNOLOGY SPORTS and site visits. It has been argued that CTR—at least LACK OF NOT ENOUGH ROI when used in isolation—is not necessarily the best way STANDARDIZED METRICS MUSIC GAMING to measure video ad success. [1] LEAST PREFERRED HUMOR MOVIES Methods for Measuring Video Success 39% 38% 35% 30% 29% 22% 20% 19% 19% 17% CLICKTHROUGH RATE ACTUAL PRODUCT VISITS TO THE BRAND BRAND AWARENESS VIDEO COMPLETION REACHED TARGET SOCIAL ENGAGEMENT TIME SPENT NUMBER OF TIMES INTENT TO PURHASE SALES WEBSITE OR RECALL RATE AUDIENCE (SHARING/LIKES) WATCHING VIDEO VIDEO WAS VIEWED11 12 1: Video’s Great CTR Debate: Can predictive analytics bring enhanced value to digital’s hardest working metric?, TidalTV, June 2011.
  8. 8. Study Methodology Contact Information Study findings are derived from an online survey completed by 320 persons working for advertising agencies and the Press companies that hire them (i.e. marketers) in the United States and Canada. Respondents were solicited from the Dale Legaspi, Press Manager Advertiser Perceptions Inc. proprietary database of media decision makers and offered a cash incentive for survey completion. All respondents are involved in the decision-making process for choosing what types of online media will be Research included in advertising campaigns. They work for companies spending a minimum of $1 million annually on online Andy Tu, Vice-President Marketing advertising. Survey results have a margin of error = ± 7%. Sales Andrew Budkofsky, Executive Vice-President Sales & Partnerships Glossary Agency Company engaged in advising clients on where Non-video display ads Online banners, non-video rich media, and About Break Media to spend their advertising dollars text-based ads Break Media is a leading creator, publisher and distributor of digital entertainment content including video, editorial, Display ads Publisher and games. The companys properties include the largest humor site online——as well as MadeMan, Online banners, non-video rich media, Company that owns and operates websites text-based ads, and video ads consisting primarily of content GameFront, HolyTaco, ScreenJunkies, CagePotato, AllLeftTurns, Chickipedia, and TuVez. The Break Media Creative Lab is an in-house production studio creating original videos that range from award-winning branded entertainment to DVA VAN celebrity-driven web shorts to viral one-offs. The Break Media Network represents hundreds of publishers as one of the Digital video advertising; any online video ad Video advertising network; company engaged in distributing video ads across publishers’ websites largest video advertising networks online, reaching more than 120 million visitors each month. For more information, excluding rich media visit Marketer Company that advertises its products or services (including in-house agencies)13 14
  9. 9. Distribute Create ActivateMetrics from last year’s Digital Video Advertising Trends report have been featured in the New York Times, eMarketer,MediaPost, ReelSEO, Beet.TV and other industry publications.Copyright 2011 ® by Break