The songs and dances of the Digital Content NewFronts seem to be working: Last year’s events in New York led around 80% of marketers and agency execs who attended them to invest money in Internet video ads, according to a survey from the Interactive Advertising Bureau.
Moreover, most ad execs surveyed expect to boost their digital-video budgets over the next 12 months – in part by shifting dollars from traditional TV, the study found.
Of course, the research is sponsored by IAB, the trade group that coordinates the NewFronts, so it has a vested interest in trying to prove the sessions are effective at yielding actual commerce. This year’s two-week NewFronts, which kicks of Monday, will feature presentations by more than 30 Internet media firms and agencies.
Still, there’s been plenty of evidence of the rise of digital-video consumption and ad spending, and the IAB survey reinforces that. In 2014, U.S. digital-video advertising totaled $3.3 billion, up 17% from $2.8 billion in the year prior, according to an IAB study prepared by PwC. Research from independent firm eMarketer is even more bullish, which pegged the market last year at $5.8 billion and projects it to grow about 30% to reach $7.8 billion in 2015.
About 68% of the 305 marketers and agency executives polled for IAB’s survey said they expect to see their digital-video ad budgets increase in the next 12 months. The survey was conducted by New York-based Advertiser Perceptions online from March 26 to April 9, 2015. 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.
“This study demonstrates unequivocally that digital video is a fierce competitor for advertising dollars,” said Sherrill Mane, IAB’s senior VP of research, analytics and measurement.
For the most part, buy-side advertising executives expect that greater investment in digital video will come from rising advertising budgets in 2015, but also from a reallocation of spending from broadcast and cable television. Two-thirds (67%) of the survey’s respondents said that they anticipate their broadcast and cable TV ad budgets to stay the same – or decrease – in the next year.
According to the IAB survey, the 2014 NewFronts were “directly responsible” for driving 36% of buy-side attendees’ spend on original digital video advertising over the past 12 months. That’s up from 24% for the 2013 NewFronts, according to the study.
In addition, the study found that 67% of marketers and agency execs said original digital video will become as important as original TV programming within the next three to five years. What’s critical for that to happen, according to Mane, is that digital players show they can develop effective sales and branding opportunities and for the industry to produce metrics consistent with TV.
The majority of ad execs surveyed (67%) across key categories – automotive, consumer packaged goods, financial services, retail and telecommunications – said they anticipate moving a portion of spend out of TV toward digital. CPG, financial services and telecom marketers expect the shift to digital to have the biggest impact on cable TV ad budgets, while retailers see digital video cutting into broadcast spend. In addition, 63% of automotive advertisers say they are most likely to grow digital video ad spending from expanding total budgets, according to the IAB survey.