Advertisers are back buying video ads—where are these ad dollars going and what does it tell us about the future of video advertising? MediaRadar is here with the answers.
No surprise here, but people like watching videos.
So much so that the average person spends more than 2 hours a day watching them.
Some estimates predict that time spent watching videos will start to plateau or decline—not because video’s becoming less popular, but because there’s only so much time in the day. However, the popularity of OTT, mobile and YouTube will keep videos around forever.
Advertisers are capitalizing on the obsession with video by investing in ads across these platforms and channels.
In Q1 2022, advertisers spent $5.5b on video ads, representing an increase of 64% from Q1 2021.
YouTube drove this increase, but that’s par for the course.
Our upcoming trend report takes a closer look at video spending and examines how advertisers view YouTube compared to other video inventory.
Hint: They love YouTube.
Advertisers Are Back and Lovin’ Video
After a regression in the number of advertisers buying video ads at the height of the pandemic, they’re back in a big way.
In Q1 2022, 15.4k advertisers bought ads on YouTube and other channels.
To put this into perspective, in Q1 2020 and Q1 2021, 9.1k and 5.4k advertisers, respectively, bought video ads.
While it’s great to see advertisers returning and a strong signal that the world’s returning to normal, the cheers are mainly coming from YouTube.
In Q1 of this year, 60% of advertisers only bought ads on YouTube, while 26% bought ads on YouTube and other video channels.
Said another way, 86% of the advertisers who bought video ads in Q1 2022 allocated some of their dollars to YouTube.
Although you may not be surprised that YouTube attracted advertisers, what’s notable is how this shifted in just a year.
In Q1 2021, 44% of advertisers only bought ads on YouTube, while 33% bought a combo.
The shift illustrates the premium advertisers put on YouTube’s ad capabilities and how much they covet the inventory.
While it’s impossible to predict the future of digital advertising, this YouTube-heavy approach will likely live on as advertisers continue to make sense of post-pandemic advertising.
Advertisers Only Like Post-roll Ads on YouTube
Conventional wisdom has it that pre- and mid-roll ads would be the most popular format among advertisers.
After all, who’s going to stick around after a video to watch an ad?
But based on our data, people watching videos on YouTube are more than happy to stick around.
In Q1, 42% of YouTube buys were of post-roll ads.
For comparison, post-roll ads accounted for 1% of ads outside of YouTube’s walls.
The popularity of post-roll ads on YouTube versus other platforms is more about the YouTube audience’s engagement levels than it is about the actual ads—a post-roll ad is a post-roll ad no matter where it shows up.
The reality is that people watching videos on YouTube are inherently more engaged and likely to watch more than one video at a time, which is one of the major draws attracting advertisers to the platform.
It’s YouTube or Nothing for the Top-spending Categories
The categories you’d expect to buy the most video ads—Media & Ent., Tech, Finance, Pharma and Retail—did just that in Q1 2022.
In the first quarter of the year, these five categories accounted for 63% of the quarter’s video ad spend.
What’s worth noting is that these categories combined to send 83% of their video dollars to YouTube.
Comparatively, in Q1 of last year, YouTube captured 65% of the video investment from advertisers in these categories.
Again, the aggressive spending on YouTube speaks to just how much advertisers across industry lines love what it offers and how much they trust it to help them achieve their campaign goals.
The Writing is on the Walls for Everyone Except YouTube
Seeing that YouTube continues to attract the most ad dollars from brands isn’t breaking news; it’s expected.
That said, the dominance it showed in Q1 should serve as a warning to other video ads and channels.
YouTube has a firm grip on advertisers’ wallets. To pry them away, other players will have to up their game. If they don’t, the group of advertisers who only invest in YouTube will continue to soar.
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