Dive Brief:
- U.S. marketers are on target to spend even more on programmatic video ads than what was predicted last September, eMarketer said in a new report shared with Marketing Dive.
- In September, 2018, the industry research firm forecast that, by 2020, programmatic video ads would constitute 48.7% of all programmatic ad spending in the US by 2020. EMarketer revised that forecast upwards, to 49.2% or $29.24 billion for 2019 alone. By 2020, spend is projected to reach $34.92 billion or 49.7%. The reason for the revision is a boost in programmatic spending on connected TV, over-the-top (OTT) video and social video ads.
- Social networks like Facebook, Twitter and Snapchat, which offer programmatic direct ad manager tools, account for about a third of total programmatic video ad spend. For eMarketer, programmatic video ads include in-stream video ads before, during or after video content, social network in-stream video ads on platforms like Facebook Watch and Snapchat Shows, and outstream video ads such as native, in-feed, in-article, in-barrier and interstitial video ads.
Dive Insight:
Several trends are converging to drive growth programmatic video ad spending. OTT services like Roku and Hulu are increasing their efforts to bring in new advertisers, fueled by subscribers eager to cut the cord to cable companies. Demand-side platforms are building up their ability to programmatically sell ads to TV networks, and, with the increased availability of high-speed wireless networks, mobile users are increasingly watching digital video on their phones and tablets.
Video ads generally pay much higher rates than other kinds of digital ads, in part because the placement — such as in the middle of the video stream — makes them unavoidable. Another factor is the multi-platform popularity of many kinds of video content, especially as cable and OTT program producers focus on developing video programs for targeted, highly enthusiastic audiences instead of broad-based fare.
It's entirely possible that eMarketer will have to revisit its projection again in the near future, as programmatic video ad buying becomes a bigger factor for TV networks, and as more OTT networks come along. NBCUniversal, for instance, is one of many major program producers that will launch an ad-supported OTT service in the coming months.
