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Digital-Video Ad Spending to Keep Eating into TV Budgets: Survey

Ad bucks will continue to flow away from TV and into online-video: 67% of Madison Avenue execs who expect 2014 advertising budgets for digital video to increase say a portion of that funding will be reallocated from television spending, according to a new survey.

Advertisers anticipate spending 17% more on digital video in 2014 compared with 2012, IAB’s survey found. But what’s also interesting is that almost half (48%) of respondents think the increase in their digital video spend will be backed in part by an overall expansion in ad budgets.

“It is not just coming from TV,” said Sherrill Mane, IAB’s SVP of research, analytics and measurement. “A significant number of respondents anticipate moving more money into digital by getting more dollars overall.”

For major campaigns, the Internet nearly at parity with TV. Among those who buy digital-video ad inventory, in 2014 on average they expect the split to be 51% with TV and 49% with digital video for advertising involving “the biggest or most important product or service.” That’s up from 58% for TV and 42% for online video in 2012.

SEE ALSO: Advertisers Spend More Online Than on Broadcast TV for the First Time

The trade group is releasing the survey results at the start of the 2014 Digital Content NewFronts in New York, now in its third year. The 10-day series, managed by the IAB, will feature presentations by 22 digital video and advertising companies, including AOL, YouTube, Hulu, Microsoft and Yahoo.

Three-fourths of survey respondents said original digital-video programming will become as important to their businesses at TV within five years: About 33% said they agree “completely,” while 42% said they “somewhat” agree. “If you are working across screens in different places and different times, that’s an important thing to know,” Mane said.

The survey was conducted on behalf of IAB by Advertiser Perceptions, which polled 297 marketing and agency executives online from April 1-16. To qualify, execs needed to be involved in digital video or TV advertising decision-making at a company responsible for at least $1 million in total ad spending in 2014.

Over all, 65% of ad execs anticipate that they will spend more on digital video advertising in the next year than they did in 2013. Respondents said they plan to nearly spend half (48%) of their internet video budget on “made for digital” video programming in 2014, up from 44% in 2012.

According to the IAB, the NewFronts have been effective — not necessarily resulting in business that’s transacted immediately in the wake of the presentations, but in highlighting opportunities for digital video advertising. About 90% of advertising execs who attended the 2013 NewFronts said that the events influenced them to spend more money on original digital programming or increase their overall 2014 budgets, the survey found.

However, advertisers also said that digital content providers must support this increased spending by demonstrating the medium’s effectiveness in sales and branding while providing digital metrics consistent with TV.

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