Global spending on digital video advertising is set to reach $30 billion this year, and despite concerns around brand safety and ad fraud the majority of this new spend is going on social platforms, according to WARC’s latest Global Ad Trends report.
WARC reports that total global spending on online video advertising, including pre/mid/post roll, social, and broadcaster video on-demand (VOD) will reach $29.8 billion this year, representing 27.5 percent year-on-year growth.
Given linear TV’s much lower predicted growth of 1.1 percent, WARC says online video advertising will continue to take a greater share of total video spend, reaching 17.5 percent this year. In some markets this share is much higher – in the UK for example, online video is predicted to account for 38.2 percent of all video ad spend this year.
While digital video ad spend continue to rise, the majority is being poured into social media platforms due to the fact that consumers are increasingly watching video content via mobile. WARC’s data finds that 60 percent of daily online video viewing now occurs on mobile devices, which benefits mobile-optimised social platforms such as YouTube and Facebook.
“The vast and continuing increase in video consumption via mobile devices has directed ad dollars to social platforms, despite the well-documented and persistent risks around negative adjacency and ad fraud,” said James McDonald, data editor at WARC.
This trend has been particularly prevalent in the UK, where 81.2 percent of the £1.6 billion spent on digital video ads last year was paid to social platforms, up from 55.4 percent in 2014.
The fact that spending on social video is so high is perhaps surprising given the issues that have faced social platforms over the past year. YouTube’s brand safety woes continued into 2018, Facebook has been embroiled in data leaking scandals, and the practice of influencers buying fake views was raised as a key topic by Unilever’s chief marketing officer Keith Weed at Cannes.
Despite all this, these social platforms continue to draw huge amounts of video ad spend, and in fact influencers specifically continue to be a big draw. WARC found that on YouTube, influencers accounted for 84 percent of all video views in Q1 this year, while on Facebook they drew 56 percent of views. Influencers’ value in attracting audiences has been borne out in competing social platforms attempts to lure them away from the competition, with Twitch for example reportedly offering influencers guaranteed incomes in return for them broadcasting on the Twitch platform.
These trends look set to continue into the near future. According to Nielsen data, 79 percent of chief marketing officers view social media as either “extremely important” or “very important” to their strategies, and 63 percent see online video as either extremely or very important. However, one source of hope for traditional publishers is the fact that some governments are considering taking action to help support news media in the face of intense competition for ad spend from social media.
In the UK for example, a government review is underway assessing the sustainability of quality journalism, analysing the impacts social media and the digital advertising ecosystem have on news publishers. Calls for substantive action also received support from UK opposition leader Jeremy Corbyn today, who proposed a tech firm tax on companies like Amazon, Google and Facebook to help support the country’s news media.