Video ad dollars shifting to OTT

June 7, 2018
Video advertising dollars are increasingly shifting to over-the-top (OTT) platforms. According a SteelHouse survey of both brand-side and ...

Video advertising dollars are increasingly shifting to over-the-top (OTT) platforms. According a SteelHouse survey of both brand-side and agency marketing professionals, conducted by Advertiser Perceptions, marketers plan to dramatically increase their budget commitments to OTT, which the company dubs "connected television (CTV)." Some 78% of marketers surveyed plan to buy ad inventory on streaming TV within the next 12 months.

While only 2% of those surveyed said they never used video in their ads, 49% use video frequently, 38% use it occasionally, and 11% use it in all campaigns. An average of 30% of total advertising budgets are allocated to digital video across multiple channels, with 28% of that going to social platforms, 26% to in-stream, 20% to traditional local or national TV, and 13% to in-unit ads. But it was the newest category, CTV, also described as IPTV or OTT, that made the strongest impression, garnering 12% of planned video spend.

"With more than 400,000 people cutting the cord from cable in favor of CTV every month, advertisers are having to rethink how to reach their audience," said David U. Simon, CMO, SteelHouse. "CTV is a fully addressable, all-digital channel that combines the storytelling power of traditional television with the targeting and accountability of digital media. This study reflects a market that is changing rapidly, and we're excited to be in a position to let our clients and partners leverage these insights through our technology."

The survey also found video measurement is still evolving. The top three KPIs for evaluating video inventory were completion rates (49%), impressions/reach (46%), and quality scores including viewability and fraud (44%). However, there were differences between marketers and agencies. Marketers identified impression/reach (48%), completion (47%) and click-through (44%) as the most valued metrics, while agencies chose completion (53%), quality scores (45%) and in-target delivery/GRPs (comScore, Nielsen, etc.). Sales attribution was low for both (28%).

Advertiser Perceptions conducted the online survey of 150 digital advertising decision-makers; 66% were marketers, and 34% were agencies. 57% had a VP title or above. Respondents' mean digital ad budget was $30.1 million.

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