Online video spend overtakes banner ads for first time
Advertisers are spending more on video ads than banner ads for the first time, according to the latest Internet Advertising Bureau UK/PwC Digital Adspend report, published today (16 October).
In the first half of 2017, advertisers spent £699 million on video ads – a 46% year-on-year rise – whilse spend on banner ads increased by just under 2% to £685 million. Video is the fastest-growing ad format and now accounts for 35% of all spend going on display advertising.
The time people spend watching short video clips has almost trebled over the last three years, up from 51 minutes per week in 2014 to 2 hrs 21 minutes per week in 2017, according to YouGov data.
Within video advertising, spend on outstream/social in-feed nearly doubled and is now the most popular format, accounting for 52% of video spend (£363 million), overtaking pre- and post-roll ads which account for 44% (£309 million).
Display advertising as a whole grew 18% to £2 billion, whilst search grew 15% to £2.8 billion and classifieds remained flat at £692 million.
Overall digital adspend grew 13.8% to £5.56 billion in the first half of 2017.
With half of UK internet time now being spent on smartphones, mobile’s share of digital adspend has risen from 35% to 43% (£2.37 billion).
Mobile’s year-on-year growth was 38% and now accounts for 57% of all display adspend, 70% of video spend and 83% of social media spend.
Adspend on social media sites grew 42% to £1.05 billion, accounting for over half (53%) of the display ad market.
Celine Saturnino, chief commercial officer, Total Media
The stats reported are not surprising, but they do serve as a good reminder of the challenges and opportunities in digital. The attention deficit in digital, particularly for more ‘standard’ formats has been well reported. This combined with the requirement for publishers to better monetise their inventory – and the fact that more TV content is being viewed online – naturally leads to increases in the popularity of video based advertising.
Advertisers now need to focus on what these adjustments in consumer behaviour and changes in inventory type mean for how they create and deliver their advertising, ensuring the delivery of mobile first creative and being memorable in the few seconds that a consumer will typically spend absorbing their message.
Michael Todd, head of advertising industry relations, Google UK
The 46% year on year rise in video ad spend is encouraging to see. Video is a powerful and personable way for brands to reach consumers who are highly engaged with the content they are watching. Ultimately, video enhances the relationship between brands and key audiences.
Additionally, the growth in mobile spend reflects the reality we have been talking about for a while now; that this is where consumers are increasingly spending their time. We can only expect to see this increase and advertisers should continue increasing their mobile ad investment to keep up with this trend.
Mark Jackson, MD, MC&C
The fact that online video is the fastest growing format is evidence of the acceptance of the medium as part of the online experience. The past few years have seen many of the major online players and social media giants evolve their video offering to integrate more seamlessly with the user experience and clearly it has worked – the time people spend watching online video has trebled over the past 3 years.
The trend away from banner ads towards video makes a lot of sense from a growth perspective – people are far more likely to engage with video content in their feed than stop to read a banner ad that sits on top of their content, increasing your chance of brand recall.