Advanced Television

Video ad-spend surpasses 2011 forecasts

December 16, 2011

Break Media, a creator and publisher of digital video content, has published the findings of its annual Digital Video Advertising Trends study, which found that digital video advertising spending is up and expected to continue to increase throughout 2012. In addition to organic growth of budgets, the increase is projected to come from a number of existing sources, including 32 per cent from television budgets, and be reallocated into new platforms such as mobile – easily the fastest-growing format – connected devices and the emerging ad selector format.

Key findings from the study include:
– Video spending to increase: In the coming year, 68 per cent of advertisers will increase the share of online display advertising devoted to video ads.
– Video budgets being driven up from multiple sources, including TV: Advertisers increasing video ad spend in the next year say the dollars will come from television budgets (32 per cent), overall advertising budget growth (38 per cent) and non-video display budgets (45 per cent).
– Video Ad Network use skyrocketing: More than 90 per cent of all advertisers plan to use video advertising networks in the coming year, increasing the share of spend devoted to them from an average 20 per cent to 41 per cent of total video dollars.

Cost per View model offered by more publishers and networks: The pervasive use of video ad networks (VANs) has driven variety in the pricing models available, and the CPV model has increased two-fold in the past year (to 40 per cent). A number of advertisers indicated they used Cost per Thousand (CPM) and Cost per Click (CPC) models because CPV wasn’t offered by publishers or VANs.

“Video advertising spending is growing faster than expected, and this is the first time a significant portion of the increased resources devoted to it are coming from television budgets,” said Andy Tu, vice president of marketing for Break Media. “New ad formats and pricing models are changing the landscape for how video inventory is bought and sold. The Cost per View model has clearly caught traction in a short amount of time, and new formats including mobile video and advertising on connected devices will be compelling ways for brands to connect with consumers in the coming year.”

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