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Original Digital Video Programming to Be as Important as TV [Study]

  |  April 29, 2014   |  Comments

A new study shows that in the coming years, original digital video programming will become as important to a business' success as television advertising.

According to a survey released Monday by the Interactive Advertising Bureau (IAB), the vast majority of brand marketers and advertising agency executives expect original digital video programming to become as important to their businesses as television advertising within the next three to five years. The survey also found that the bulk of that increased Internet spending will migrate from television budgets.

The publication of the study, which aims to track advertiser attitudes toward the evolving medium of digital video, coincides with the start of the Digital Content NewFronts, the annual upfront marketplace for the unveiling of and sale of advertising opportunities within original digital video programming. The 2014 Digital Content NewFronts event, which is managed by the IAB, will feature presentations by 22 of the largest and most important digital video and advertising companies during the next 10 days.

The survey of 297 buy-side executives, conducted by the research firm Advertiser Perceptions, uncovered a prevailing optimism around digital video, with 65 percent of advertisers anticipating that they will spend more on digital video advertising in the next year than they did in 2013. This comes in contrast to TV advertising, with two-thirds of respondents saying that they will help pay for their digital video increases by shifting funds from television. Additionally, 48 percent of respondents think the increase in their digital video spend will be backed in part by an overall expansion in ad budgets.

Expectations are particularly high for original content. Executives surveyed say they plan to nearly spend 48 percent of their Internet video budget on "made for digital" video programming in 2014, up from 44 percent in 2012. And three out of four advertisers foresee original digital programming starting to become as important as TV programming within the next three to five years.

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

The Digital Content Newfronts, which were founded as a marketplace in 2012 by global marketing and technology agency DigitasLBi and the publishers AOL, Google/YouTube, Hulu, Microsoft, and Yahoo, have themselves had a significant impact on the market's positive perceptions of original digital video content, according to the Advertiser Perceptions study. Ninety percent of advertisers are already aware of the Digital Content NewFronts, with 80 percent of those aware planning to attend this year. This would mark a 145 percent increase in attendance over 2012. Additionally, 90 percent of advertisers who attended the 2013 Digital Content NewFronts said that their participation influenced them to spend more money on original digital programming or increase their overall 2014 budgets.

In a press release, Randall Rothenberg, president and chief executive (CEO) of IAB, said, "There is a clear need for a showcase and an upfront advertising buying opportunity for original digital video content." He added, "The medium is already generating hit shows and cultural buzz, so it's unsurprising that - as the study shows - advertiser budgets are following the eyeballs."

In the same release, Sherrill Mane, senior vice president of Research, Analytics, and Measurement at IAB, said, "This survey provides invaluable insight into advertisers' evolving attitudes toward digital video programming and shows that the NewFronts is playing an integral part in fueling the movement of ad dollars to the medium." She added, "The buy-side is not only foreseeing strong spending at the 2014 NewFronts, but is also recognizing the significant effect it has on their perceptions and budget decisions long after the last presentation is over."

Digital marketers can download the Digital Content NewFronts: Video Ad Spend Study and the NewFronts App on IAB's website.

Image via Shutterstock.

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Greg Jarboe

Greg Jarboe is president of SEO-PR, which provides search engine optimization, public relations, video marketing, and social media marketing services. He's the author of "YouTube and Video Marketing: An Hour a Day," a faculty member at Rutgers University and Market Motive, as well as a frequent speaker at SES conferences.

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