Digital video threat to TV gets real

Warc, 30 April 2014

NEW YORK: Two thirds of US advertisers expect to increase their spending on digital video advertising in the coming year with a similar proportion indicating that the money for this will be diverted from TV budgets.

A new survey from the Interactive Advertising Bureau (IAB), covering 297 buy-side executives found that most brand marketers anticipated that over the next three to five years digital video would become as important to their businesses as television advertising.

While two-thirds of respondents said they would help pay for their digital video increases this year by shifting funds from television, almost half (48%) thought that they would also be aided by an overall expansion in ad budgets.

Nor was this shift likely to involve simply running existing content on a different platform. An increasing proportion of that spending was earmarked for original digital video content – 48% in 2014 compared to 44% in 2012.

Even though the survey showed the increasing importance that marketers attached to digital video, they were still wedded to traditional measurements, as they wanted content providers to show effectiveness in sales and branding while providing digital metrics consistent with TV.

The IAB's survey coincides with the 2014 Digital Content NewFronts, the digital publishers' equivalent of the annual TV upfronts. The trade body noted that attendances at the event were expected to be up this year and that 90% of those who attended the 2013 event said this had influenced them to spend more money on original digital programming or increase their overall 2014 budgets.

IAB president Randall Rothenburg, writing in AdWeek, rejected any suggestion that the NewFronts constituted an attack on the "classic medium" of television. "Rather, digital video represents a culmination of television and the start of a post-television world," he declared.

He argued that the development of digital video had mirrored that of cable TV, moving from repurposed content to producing original material. The outcome was not the decimation of the TV networks but "a trove of new opportunities [for marketers] to connect with their target consumers".

Data sourced from IAB, Advertising Week; additional content by Warc staff