Video is the coolest kid at the video advertiser table right now. Its ability to cross generational lines and repeatedly outperform static and less-engaging counterparts has made video ads a mainstay in ad strategies.
In fact, a study found that people are 27x more likely to click on video ads than banners.
In the first half of 2022, 37.8k companies promoted nearly 57k brands via video ads on social media, YouTube and OTT.
More than half of this spending came from advertisers in Media & Entertainment, Retail, Services, Finance & Real Estate and Technology. Collectively, advertisers in these industries spent nearly $9mm.
The scale and adoption of video ads isn’t the headline story, though.
A level deeper, some interesting storylines develop. Here are the three video advertising trends you need to know.
Advertisers Are Kickin’ it Old School
The video world is in a state of constant change to meet the shifting consumption habits of society.
In tandem with video’s growth has been an equally rapid evolution of video advertising. CTV and OTT are perfect examples of this.
Despite the options, many advertisers are still kicking it old school.
Case and point: 68% of advertisers in H1 2022 bought only video ads on social media or YouTube.
No one will second guess spending on social or YouTube because the average person spends 147 minutes per day on social media and more than 29 minutes per visit on YouTube. A hefty dose of video ads are a necessity.
It always will.
While social media platforms and YouTube will remain locked in a tight race at the top, social media could gain an edge, thanks to platforms like TikTok taking hold with younger generations and the more authentic forms of marketing it can provide.
In fact, TikTok is on track to overtake Facebook in terms of influencer marketing spending this year and will surpass YouTube by 2024.
Regardless of their paths, YouTube and social media will always command significant video ad dollars.
That said, a line may be forming that’ll impact where advertisers decide to spend.
For example, social media may attract more dollars from video advertisers who want to spend on influencer marketing.
Only time will tell.
OTT Ads Still Aren’t a Mainstay
If traffic and popularity were the benchmarks that advertisers used to decide how to allocate their ad dollars, OTT would be in the mix.
As of February 2022, there were more than 240mm OTT users in the US.
OTT is how the overwhelming majority of people consume content—now and in the future—which is why it’s surprising that only 16% (9.2k) of video advertisers invested only in OTT ads.
Reminder: 35% and 33% of advertisers only bought video ads on social and YouTube, respectively.
If we add in the advertisers who weren’t ready to call themselves exclusive with OTT, i.e., they bought OTT and social and/or YouTube, that number jumps to 26%.
Still, for something so popular, why are such a relatively small group of advertisers giving OTT their undivided attention?
The (likely) answer: maturity.
Despite its popularity among consumers, OTT advertising is still relatively new.
So, while social and YouTube attract advertisers because they’ve been around the block, advertisers are staying away from OTT because it doesn’t even have its training wheels.
The types of companies investing big dollars in OTT support this way of thinking.
Two companies that leaned in heavily to OTT were Unilever (Dove Body Love Shower Collection, Klondike Bars and Vaseline Cocoa Radiant Collection) and Proctor & Gamble (Downy Liquid Fabric Conditioner, Gain Laundry Pacs and Tide).
The willingness of advertisers from these companies could indicate that OTT is still too “risky” for those with smaller budgets or less wiggle room for experimentation.
Until OTT advertising can prove its worth over and over again, some advertisers will steer clear—those from Nintendo, The Home Depot and Walmart already are (although that’s likely more to do with preference than risk appetite).
While this strategy makes sense, it means that many advertisers are bypassing inventory and opportunities to reach consumers with some of the most engaging ad types out there. Given fewer advertisers are investing here, this can also be an opportunity to stand out in an environment with potentially lower ad loads.
No Mixing and Matching
Spend any amount of time Googling “marketing buzzwords,” and you’re bound to come across some version of “cross-channel” or “omnichannel” marketing.
These terms rose to fame—and pain—as consumers quickly adopted technology and incorporated it into their lives.
Today, the average household has access to 22 connected devices, meaning that the path to purchase for the average Joe and Jane is the furthest thing from linear.
Advertisers account for this by launching cross-channel campaigns that dot the Internet with ads, ensuring they stay in front of their target audience whenever and wherever they are online.
For whatever reason, many advertisers are ignoring this inherent behavior when it comes to their video ads—at least through the first half of the year.
Instead, many advertisers are throwing their dollars at one or two channels; only 3% of advertisers invested in social, YouTube and OTT, including The Walt Disney Company, Comcast, Amazon, Paramount and Mars.
These top-spending categories combined to spend nearly $2.5b in H1 and included big names like Burger King, GEICO and Verizon, which all spent more than $100mm on a three-pronged video approach.
All in all, 86% of advertisers during H1 kept their video ad dollars in one ecosystem.
It’s hard to say why advertisers are so steadfastly against mixing and matching their video strategy, but the makeup of the advertisers investing in these ecosystems could start to paint a picture.
YouTube is the preferred video advertising destination for 44% of Technology and 37% of Media & Entertainment advertisers, including those from Lingokids (Media & Entertainment) and Wix eCommerce (Technology).
On the flip side, more than half of Finance & Real Estate (52%) and Retail (53%) advertisers went with a social-only video strategy, including Albertsons and Found (a small business banking app).
Is that enough to paint a definitive picture as to why advertisers are picking social over YouTube or vice versa?
No, so the decision likely has to do with historical data and comfort zone.
Given today’s uncertain macroeconomic climate, many advertisers will stick to what’s worked in the past. For the next several quarters, efficiency and smart spending will be key for advertisers of any size.
That said, the siloed video ad strategies do present an opportunity for advertisers willing to mix and match; advertisers that can do so effectively will stand out and differentiate themselves from the competition.
Hey Advertisers—There’s More Inventory Out There
There’s no denying that advertisers of all stripes love video.
There’s also no denying that many of them aren’t spreading the love across all the inventory available.
That’s the opportunity.
For advertisers looking to maximize their budgets, scaling their dollars across applicable video channels will be a must.
The online world is far too complex and crowded for siloed video ad strategies to perform long term.
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