Here’s How Much Advertisers Have Increased Their Digital Video Ad Spending

As NewFronts begin, IAB releases annual study

The growth of online video has been well chronicled. Beginning this morning and continuing for the next two weeks, some 39 digital video players will try and persuade advertisers and media buyers to continue spending on digital.

Despite some arguing that shifting dollars away from TV can have an adverse effect, there's still a good chunk of buyers who are planning to do just that this year. According to the Interactive Advertising Bureau's third annual Video Ad Spend study, which surveyed 360 marketing and media buying professionals, nearly three-quarters (72 percent) said they will move funds out of TV in an effort to increase their spending on digital video advertising.

"Marketers and agencies are telling us they clearly see great value in original digital video programming," said Anna Bager, svp and general manager of mobile and video at IAB. "This study demonstrates that the NewFronts has the ability to move ad dollars."

Among those who said they're increasing their spending on digital video, 41 percent said they would pull from cable TV advertising, while 47 percent said it would come out of broadcast TV spending. (Multiple answers were allowed.) Other sources of extra digital video spending included overall expansion of budgets (41 percent); nonvideo ads online (30 percent); advanced-interactive TV (30 percent); mobile video (28 percent); and neither digital nor TV (29 percent).

The study further revealed that more than two-thirds of marketers and agency executives (68 percent) believe original digital video will become as important as original TV programming in the next three to five years.

More broadly, the study found that advertisers and media buyers have increased their investments in original digital video programming by 114 percent over the past two years. Advertisers are spending on average more than $10 million annually on digital video, an increase of 85 percent from two years ago.

And while some buyers remain critical of the annual two-week marketplace, which is in its fifth year, the study found that attendance at NewFronts played a crucial role in increasing spending on digital video. Eight out of 10 respondents said their attendance last year resulted in increased spending on original digital video content in the 12 months that followed—71 percent plan to attend this year and expect to spend more than a third of their overall digital video budgets for the year at the annual marketplace.