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When it comes to video ad sales, marketers don’t need a linear path to success.
According to the Interactive Advertising Bureau’s newly released 2024 Digital Video Ad Spend & Strategy Report, it’s going to be a big year for digital video. The report, which comes ahead of next week’s NewFronts events, noted that digital video ad sales are growing nearly 80% faster than media overall, with spend, including connected TV (CTV), social video and online video, projected to grow 16% this year, hitting $63 billion.
With those numbers, digital video spend is expected to pass linear for the first time, with revenue shifting 20% over the last four years.
David Cohen, CEO of IAB, told ADWEEK that 2023’s ad spend was 52% linear and 48% digital, and the numbers are expected to flip in 2024, becoming 52% digital vs. 48% linear.
“We are on a track or trend for all video to be digitized. There is no doubt that the future of video is streamed,” Cohen said. “Each year, we continue to see our march toward that inevitability.”
Overall, social video is on track for 20% year-over-year growth, its second straight year reaching those numbers. It is projected to reach $23.4 billion.
In addition, CTV exceeded $20 billion for the first time in 2023 and is expected to grow by 12% to $22.7 billion in 2024, 32% faster than total media overall. A significant portion of that spend is coming from reallocations from traditional media such as linear. Meanwhile, 31% of revenues are from overall ad budget expansion.
In fact, Chris Bruderle, vp, industry insights and content strategy, IAB, noted in a statement that CTV and social are “must buys” among the biggest ad spenders.
“All the things that we love around digital, from personalization to measurement and attribution to using a similar data stack to what you’re using on the other side of the equation, is taking the most powerful thing we have in marketing—which is sight, sound and motion—and adding technology and data to the equation,” Cohen said. “CTV has all the makings of an incredibly powerful marketing machine and the ability to measure, which is unrivaled.”
Of course, digital video, CTV in particular, isn’t perfect. Cohen noted that linear CPMs (cost per thousand viewers reached) could range in some cases around $10 to $12, and CTV can be much higher.
“It is much more efficient to buy linear television—in terms of human cost to execute the buys and the cost of buying cable television,” Cohen said. “I think the industry needs to move off of efficiency as a metric toward effectiveness or delivery of business results as a metric, and I think we’ll see an even greater acceleration of CTV in the future if we move that way.”
Fast contributors
CPG and retail are also making big moves in 2024, becoming the “fastest growing contributors” to digital video’s revenue rise, according to the report.
Overall, CPG is expected to grow 20%, while retail will reach 30%. According to the report, CPG brands are leveraging CTV’s scale, ability to connect with consumers directly and streaming companies’ partnerships with retail media networks.
“In the world of deprecating signals and the interest in measurement, there is hardly much better than a retail media network, which is basically closed-loop attribution reporting,” Cohen said. “It’s not surprising that as the focus has been on making sure that every dollar that you spend in the market is driving the bottom line and first-party data is front and center, that retail media is filling the void for the marketplace.”
Most categories project double-digit growth in digital video spend, with auto, financial, restaurants, B2B, travel and wellness up more than 20%.
Regarding category trends, Cohen noted that digital video in whatever form is “all up” and “driving the marketplace,” but marketers should also keep creative in mind moving forward.
“When you think about the determinant of a successful media or marketing campaign, depending on who you believe, it’s either 70% or 80% based on the creative,” Cohen said. “So if we’re not going to spend time creating thousands of different iterations, personalized messaging, then all of this opportunity is not taken advantage of. That’s an interesting thing for us to watch in the future.”
To create the report, IAB partnered with Guideline (which leveraged ad billing data) as well as data from an IAB-commissioned Advertiser Perceptions quantitative survey of TV/digital video spend decision-makers and other market estimates. Part 2 of the report will be released on July 15 during the IAB Media Center’s Video Leadership Summit.
