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AOL: TV ad budgets switching to digital video

For the third consecutive year, digital video continues to accelerate in Europe and shows no signs of stopping according to AOL’s 2015 State of European Video Industry Report.

Fuelled by online consumer behaviour, we are witnessing an unprecedented and explosive growth in mobile and digital advertising. Over $35 billion (€33 billion) has been spent on digital advertising in Western Europe alone this year, and this figure is predicted to grow to nearly $46 billion by 2019.

For many in the video space, this is an exciting time. With more investment and more sophisticated technology being funnelled into video, new opportunities and new challenges are quickly emerging. In this third European State of the Video Industry report, AOL uncovers the true consequences of this disruption. Using data from over 400 brands, agencies and publishers in key European countries, the report offers an holistic view of today’s video advertising industry and key trends across both the buy and sell sides of the business.

Mobile and video are converging, posing new opportunities and challenges to the industry

Mobile video is the strongest growth area with more than half of buyers planning an increase in mobile video ad spend, but cross-device targeting and attribution/measurement are the key pain points for agencies and advertisers.

Programmatic is ubiquitous and is set to increase

Nearly all video buyers (98 per cent) in the European markets surveyed are buying video programmatically, with approximately 40 per cent of their total video budgets being channelled this way. On the sell side, 97 per cent of those surveyed are selling digital video programmatically, with nearly three quarters of those making their premium video inventory available for sale via programmatic buying.

Programmatic metrics are more important than ever

Safety and inventory quality issues are the most frequently cited challenges for programmatic video buyers, with two in five citing viewability and fraud scores as vital when measuring campaign performance.

TV budgets are fuelling an increase in video spend

Although TV ad revenues are not declining in Europe, nearly two-thirds of the video buyers (61 per cent) in our survey who have seen an increase in their digital video budgets say that broadcast TV budgets are being reallocated to video advertising.

Video Metrics: CTR is still top measurement

While other branding metrics are becoming increasingly important, CTR is the most used metric to assess the success of video ad campaigns cited by 43 per cent of buyers. This ranks CTR higher than any other branding metrics such as impressions, reach, brand uplift and GRPs.

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