As more podcasters consider whether to produce video, the Interactive Advertising Bureau forecast U.S. digital video ad spending will increase 16% this year to reach $62.9 billion. And in a newly released report, the IAB says buyers are investing across all video content types, from short-form to long-form to creator and immersive. Short-form (69%) and vertical-format (68%) account for the largest share of buyers.
“Though the fragmentation of video content adds complexity, it also enables buyers to serve multiple consumer demos, mindsets, and interests,” IAB says. “The prevalence of short-form and vertical-format videos reflects how consumers are most likely to watch social video.”
The 2024 IAB Digital Video Ad Spend & Strategy Report shows nearly seven in ten buyers expect to buy ads on short-form video like TikTok or YouTube Shorts, while 62% expect to buy ads on creator-driven content and 57% plan to buy long-form video content – two areas where podcasters that are producing videos could benefit.
The biggest source of video ad dollars will be consumer packaged goods brands, which are projected to spend $12.6 billion this year on video ads, a 20% increase from a year ago. Retail ranks second a $7.4 billion, a 30% year-on-year increase. the IAB says automotive and restaurant brands are also finding significant value in the ability to personalize messaging based on geography.
The money to pay for digital video ads is coming from a variety of sources. IAB says 40% is coming as a reallocation away from traditional linear TV, but 40% also says that money is being moved from other non-video digital ads. And 31% say there has been an overall expansion of advertising budgets to pay for digital video ads.
“It is evident from this report that digital video will continue to be a go-to channel for advertisers looking to reach engaged audiences at scale across the purchase funnel,” the report says. “Also evident is that the market is currently in a period of transition, moving from panel data to big data and onto modeled data for understanding performance, and from transacting with a single currency to using multiple currencies.”
The findings are based on a survey conducted by Advertiser Perceptions for the IAB from Feb. 15 to March 1 among advertisers who spent at least $1 million on advertising in 2023. It shows business outcomes like sales, store/site visits, and leads are now the most important KPI for buyers, across all video channels — social video (64%), online video (58%), and connected TV/CTV (54%). Yet two in three buyers cite measurement issues. IAB says 89% of advertisers are transacting, testing, or having discussions with alternative currency measurement vendors. Buyers value multi-screen attribution (45%) and real-time reporting (43%), and 28% of buyers are already transacting on alternative currencies.
“The industry has bought, transacted, and measured against reach since the beginning of time,” said Cintia Gabilan, VP of the IAB Media Center. “But now business outcomes are the most important metrics to assess success, with reach and frequency coming in second. However, measurement is not yet where it needs to be. Two-thirds of buyers cite issues across nine key areas of measurement.”
Download the 2024 IAB Digital Video Ad Spend & Strategy Report HERE.
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