The video advertising landscape is rapidly evolving, with rising budgets, new platforms, and shifting consumer behaviors. As advertisers allocate more of their budgets to video, they face a complex set of opportunities and challenges. This blog examines five key trends shaping the video ad ecosystem, drawing insights from Sara Lebow's article "5 charts on video ads: High spend, social cache, and measurement headaches," published on October 3, 2024, on the eMarketer website (Lebow, 2024).

Surging Video Ad Spend in the US

The US leads the world in video advertising spend, with forecasts indicating $108.15 billion will be spent in 2024, a 20.8% increase over the prior year (Lebow, 2024). This puts the US video ad market around four times larger than China, the next biggest market at $27 billion in projected 2024 spend.

Several factors contribute to the US's outsized video ad spend. First, American audiences are highly accustomed to video ads, making the format feel less intrusive compared to other markets (Lebow, 2024). Additionally, social media advertising - a key driver of video - is more developed in the US, with $48.89 billion in projected social network ad spend in 2024, compared to $38.64 billion in China.

The dominance of video is also apparent within the overall US digital ad landscape. Video will make up 35.7% of total digital ad spend in the US this year, compared to 18.7% in China. This reflects the central role video has assumed for American marketers seeking to engage audiences.

Social and CTV Platforms Lead Video Ad Budgets

Looking at the breakdown of US video ad spend, social video accounts for the largest share at $23.4 billion, followed closely by connected TV (CTV) at $22.7 billion. Online video lags behind at $16.8 billion.

Social video's leading position stems from platforms like TikTok and YouTube attracting huge user bases willing to engage with longer-form video content. This has created more mid-roll ad inventory for marketers to leverage. Social video ad spend is projected to grow 24.6% this year.

The rise of CTV has also drawn significant advertiser attention and budgets. As streaming services integrate more advertising, the ability to target viewers on the big screen has become increasingly appealing. However, challenges around measurement and scale on some CTV platforms remain.

Advertisers Prioritize Reach and Quality

When selecting video ad buys, the most important criteria for advertisers are reach/scale and ad quality, according to industry data. Measurement is the third key priority. This speaks to marketers' core objectives - finding video inventory that delivers both significant audience size and high-quality brand-safe content.

The tradeoffs between social video and CTV become apparent here. Social platforms excel at scale, but may struggle with brand safety and suitability. Conversely, the premium content environments of CTV offer quality, but can lack the sheer reach of social media. Navigating this balance is a key challenge for video advertisers.

Longer Ads May Perform Better

While advertisers commonly use video ad formats shorter than 15 seconds, research suggests consumers prefer ads in the 30-45 second range for commerce-focused content. Longer spots allow for more storytelling and a clearer call-to-action.

This disconnect suggests marketers may need to rethink their ad length strategies. As consumers become accustomed to higher video ad loads, they may be more receptive to longer, more impactful creative. Striking the right balance between ad length, storytelling, and action will be crucial for driving performance.

Measurement Challenges Persist

The biggest issue in measuring TV and video ad effectiveness, according to industry experts, is accounting for co-viewing - when multiple people watch content together. This makes it difficult for advertisers to definitively know how many individuals their ads have reached.

Other measurement challenges include attribution, cross-device tracking, and the siloed nature of different video platforms. As the video ecosystem becomes more complex, with viewers consuming content across social, CTV, and online channels, holistic measurement remains elusive.

Conclusion

The video advertising landscape is characterized by surging budgets, the growing dominance of social and CTV platforms, and persistent measurement challenges. Amidst these trends, marketers must navigate tradeoffs between scale, quality, and performance to maximize the impact of their video campaigns.

Looking ahead, several factors will shape the future of video advertising:

    • Continued growth of social video, driven by user engagement and platform monetization efforts

    • Increasing CTV ad inventory as more streaming services launch ad-supported tiers

    • Innovations in measurement to provide a more comprehensive view of video campaign effectiveness

    • Creative strategies that optimize for both shorter and longer ad formats

    • Evolving consumer behaviors and expectations around video ad experiences

As the video ad ecosystem grows in complexity, flexibility and adaptability will be key for brands and agencies to stay ahead of the curve. Those that can effectively leverage data, target the right audiences, and deliver compelling creative across platforms will be best positioned to thrive in the years to come.

Reference

Lebow, S. (2024, October 3). 5 charts on video ads: High spend, social cache, and measurement headaches. eMarketer.