Video Advertising and its growing role in the Online Display Industry

The saying “a picture is worth a thousand words” has never been more true in marketing than today. This old expression not only highlights the effectiveness of pictures to capture our imagination but also its ability to communicate ideas succinctly. So it’s not very surprising that video is fast becoming a driving force in the online advertising industry.

Growth in display advertising dollars has prompted eMarketer to double its ad growth projections. According to projections, overall the market for display advertising is expected to grow at 20.2%, overtaking search to become the largest online ad spending category by 2015. One of the key factors driving this surge is the move towards video based advertising, with its share of pie expected to grow from 19.4% in 2011 to 35.9% in 2014, while Rich Media and Banner Ads are expected to moderately, by steadily, decline.So why are advertisers moving dollars from the once trusty search and banner advertising to video?

Ad Spending by format

For one there are plenty of drivers to this trend. The most commonly touted factor is engagement. Video has the power to attract an audience, communicate a story and build a connection. That’s hard to do with a banner ads. So while, 67% of all Internet users viewed some type of video advertising at least once a month in 2008, that number is expected to reach 80.6% by 2012. Consumers are lapping it up. Several studies (detailed in Your Memory: How it works and How to Improve it by Kenneth L. Highbeehave) shows that pictures of objects are often remembered better than verbal descriptions by young children, adults and even elderly adults. In addition, visual material is also a powerful aid in recalling verbal material and often more memorable than words alone.

Second, the evolution of technology particularly via HTML5 and devices, such as second screens and tablets have helped bridge a gap, allowing users to view content easily across platforms. Thirdly, according to eMarketer, video advertising given brand managers a familiar messaging medium of TV combined with the ability to leverage the ability to target an audience and gain from online advertising’s measurement capabilities.

However, there are a few potential challenges that publishers need to contend with: namely targeted set-top TV advertising; and brand advertisers eternal romance with TV, many advertisers still believe online does not give marketers the same reach they can get from TV.

This is a huge development in the industry, and publishers need to work with brands to develop messages that leverage their unique audience base and successfully leverage this trend.

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