Advertisers Are Expected to Spend $30 Billion on Online Video This Year, Despite Brand Safety Risks

Print spend rose for first time in 7 years

According to WARC, one in 10 online video placements pose a 'negative adjacency' risk for brands. Getty Images
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While brand safety issues around online video advertising persist, don’t expect spending on the format to slow any time soon.

According to a new WARC global ad trends report, advertisers are expected to spend $29.8 billion on online video this year, an increase of 27.5 percent, with most of that going to social media platforms. WARC attributes the increase, in large part, to the continuing rise of mobile video.

According to WARC, one in 10 online video placements pose a “negative adjacency” risk for brands, while the medium is also a prime target for ad fraud.

WARC data director James McDonald put the onus for brand safety issues on social media platforms, which, he said, “have offered brands assurances but who are still coming up short.”

“Indeed, it’s the advertisers who have instigated change in this area and forced the hand of the major players to clean up their acts. Reach and targeting are of little value if the context is not correct,” he added.

Still, advertisers’ continued investment does make the issue seem somewhat less urgent. At the same time, McDonald said the industry has taken some “steps in the right direction,” including the IAB Labs ads.txt script.

“There’s a long way to go and it will require a consorted effort to get to where the industry needs to be,” he said.

The nearly $30 billion expected to be spent on online video would account for around 17.5 percent of the total $170 billion anticipated to be spent on video advertising overall. That’s compared to a total of just 1.3 percent of such spending in 2010. In the U.S., online’s share of the overall video advertising market is even higher, expected to rise to 19.3 percent this year.

Despite the increased prominence of online video ads, print display advertising revenue actually rose for the first time in seven years.

“I think it’s fair to say that print is a rather undervalued medium, it has an engaged audience and offers safety and context which brands benefit from through association,” McDonald said. “I found it ironic that part of Facebook’s attempts to rebuild trust was to deliver messaging in print.”

WARC’s projections show a rise in online video consumption to 84.1 minutes per day in 2020, a 26.6 percent rise from the projected 66.5 minutes this year. Influencers also aren’t going away anytime soon, as WARC reports that they accounted for 84 precent of YouTube views in the first quarter of 2018.

McDonald told Adweek that there was an audience of some 843 million for gaming video content worldwide, which he pointed out was “larger than that of Netflix, HBO, Spotify and ESPN combined.”

“I can only see that audience growing, especially when one considers how innovative gaming is as an industry,” he said. “There’s huge potential for building brand equity via sponsorships and branded content, in much the same way as working with influencers.”

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@ErikDOster Erik Oster is an agencies reporter for Adweek.