Roughly half (51%) of advertisers are increasing their video budgets. While the average 10% spending increase over the last year is being spent across all video platforms, a study from Advertiser Perceptions indicates that emphasis will be placed on where the largest audiences are.
Targeting audiences across the different platforms to catch them at the critical stages of the funnel is something on which advertisers are focused. Linear television is being used primarily during the awareness stage, and is the clearcut first choice among video platforms for upper-funnel efforts.
While fewer advertisers are using digital/mobile video for upper funnel opportunities, this platform dominates both the middle and lower stages of the funnel capturing consumers during their decision-making and conversion stages. This makes sense as these devices are ones on which it’s easy to convert – with a clickthrough, viewers can switch to an e-commerce site or another conversion-oriented destination.
A platform worth noting – in which advertisers see potential and making are strides towards – is addressable television. Addressable television is linear television that uses data to send targeted ads to specific households instead of on a program level. Earlier data from Advertiser Perceptions revealed that 44% of advertisers were making a significant investment in addressable television.
With its ability to target personalized segments, addressable television is starting to be used by advertisers, especially in the later stages of the funnel.
Video Sites See More Ad Spend
With a bigger push towards using video for advertising, what defines premium digital video? The survey revealed that nearly 8 in 10 (79%) of advertisers defined it as content viewers return to regularly. Professionally-produced content, along with content that the target audience actively seeks out, were both qualities that more than three-quarters (76%) of advertisers perceived as hallmarks of premium video. Another 7 in 10 (71%) of advertisers felt that premium video contributed meaningful reach to their media plan.
TV network full episode players (38%) and streaming services (36%) were the highest rated in terms of quality video content by advertisers. While video sites (31%) were rated third in video content quality, Advertiser Perceptions reports that more advertisers prefer to purchase ads on these sites, presumably because they have a larger audience.
Along the same lines, some three-quarters (74%) of advertisers would prefer to advertise on streaming sites, as opposed to the 58% who prefer to advertise on TV network full episode players.
While not covered in the data, an elephant in the room for advertisers is the rise of services without an ad-funded model, particularly as services such as Netflix take up a large and increasing percentage share of viewing time. A switch to such services potentially causes a shrinking inventory for reaching target customers. Notably, though, Hulu’s decision to start ads when content is paused could signal an area where advertisers could make inroads.
Social Media Seeing the Most Advertising Action But Streaming is Gaining
Social media is the channel most used by advertisers for digital video ad spending, per the report. This strategy is probably a sound one for capturing the younger generations, with research showing that Gen Z adults (ages 18-19 years) and Millennials (ages 20-36 years) view social media as the most relevant advertising channel.
Social media is closely followed by video sites for ad spend distribution. However, when it comes to optimism, streaming services lead the pack. Streaming services had a 42% net optimism rating, slightly ahead of social media’s 39%.
More results are available here.
About the Data: Results for the report were compiled from interviews of 302 advertisers (59% agency, 41% marketers). All respondents were 100% involved in TV and digital/mobile video.