While traditional TV advertising continues to be the primary spend for brands, a new report says that a majority (56%) of U.K. ad agency media buyers expect to increase their spend on ads around VOD content by more than 25% over the next 6 months, with the average spend now exceeding £50,000.
Collective’s 2014 U.K. Online Video Advertising Market Report surveyed more than 100 VOD media planner/buyers about the United Kingdom’s s online video market, focusing on spend, content, programmatic video, measurement and targeting.
The survey found that buyers who had been responsible for linear TV ad buys now increasingly are responsible for VOD buys as well as agencies work to create integrated buying plans.
“Online video is now a regular feature in the digital planning process,” the report said, with nearly 40% of buyers saying VOD would be a factor in 75% of their campaigns and 25% saying it would factor into 90% or their plans.
The survey found VOD ad buys had increased about 12% from £50,000 to £56,000; it’s the first time average VOD spend has passed the £50,000 mark. The report said there’s plenty of room for the segment to grow, especially if ad buyers are provided with optimum targeting tools and reporting metrics, pointing again to the need for “smart data,” not just big data solutions.
Collective said brands also were trending toward using short-form video content to drive incremental reach alongside TV, while also maintaining spending growth on long-form content with broadcasters.
“TV money continues to drive online video forward, and with advances in technology now helping agencies to prove the effectiveness of online video and allowing them to choreograph messages across screens, this will only fuel further growth,” said Collective.
Less certain is the adoption of programmatic buying, the report said. More than half of respondents said they rarely use programmatic buying tools when putting together VOD buys, but that may be more reflective of the survey participants than of overall industry trends.
The study also tries to define how buyers measure an “engaged viewer.” A growing number of respondents (52%) said they look to view-through rates primarily; that’s up from 48%. About one-fifth (16%) said they used unique users as their key metric.
Collective wrote, “View-through rates are now the common currency for buyers in measuring the success of campaigns and the quality of video inventory they are buying. The importance placed on CTR has dwindled since the last time this survey was carried out, with a greater emphasis now being placed on the level of unique reach that online video campaigns can deliver.”
Nearly half (49%) of buyers also said data like audience demographics and behavior were critical to their planning. Collective said the focus on data has become tighter in each of its five recent surveys.
The bottom line on VOD ad spend is that agencies are trying to find a point of convergence between digital and TV viewers, bridging the current gap to make sure a brand’s message has the reach it needs.
To do that efficiently they need enough smart data to make smart decisions.
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