Original Digital Video Ad Spend to Grow As Advertisers Target An Appealing Audience

May 7, 2018

Ad spending on original digital video programming has been climbing rapidly in recent years and looks set to continue doing so, as advertisers eye the attractive profile of original digital video audiences, according to a pair of new reports from the IAB.

Original Digital Video Ad Spend Growing

Almost half (47%) of advertisers’ digital video advertising budgets are expected to be allocated to original digital video this year, up from 44% last year, according to the IAB’s “2018 Video Ad Spend Study” [pdf]. The report is based on a survey of 353 marketers and agency professionals involved in digital video advertising decision-making, with at least $1 million in total annual ad spend. “Original Digital Video Content” refers to programming that is professionally produced specifically for digital/online consumption.

The study’s results demonstrate that almost 9 in 10 respondents agree that their investment in original digital video programming will grow and make up a larger share of advertising dollars as more networks/channels launch direct-to-consumer streaming sites

In fact, roughly two-thirds (68%) of respondents plan to spend more on original digital video advertising this year than last, with agencies ahead of marketers in spending increases and volume. Among those hiking their ad spending, the largest share (44%) will fund the increase due to an overall expansion of budgets, but many will pull from cable TV (34%) and broadcast TV (27%) advertising, too.

One reason that they could be shifting funds from traditional TV to original digital video is the audience. Some 84% of survey respondents agree that advertising that appears in original digital video reaches an audience that can’t be reached on TV.

The Original Digital Video Audience: Young and Diverse

Original digital video – defined in this case as ad-supported, professionally-produced, digitally-distributed, original video programming – boasts an audience of 86 million Americans ages 13 and older. That’s according to a separate IAB study – “Digital Video Viewers and Brand Connection” [pdf] – which pegged the original digital video audience at one-third (32%) of the total population ages 13 and older. (The report is based on a survey of 2,022 respondents ages 13 and older, weighted back to the most recent Census data.)

The original digital video (ODV) audience skews young and diverse, per the report, which argues that the audience is “desirable for brands that want to reach the elusive younger demos.”

In fact, this audience has an average of 34, considerably younger than the average age of people who watch TV shows online (40) and those who watch ad-free original digital video, such as through Netflix and Amazon Prime (42).

Fully 60% of the original digital video (ODV) audience is aged 13-34, with those watching ad-supported original shows, clips and extras skewing younger than those watching ad-supported original series.

This audience also profiles as being more diverse than the US population at-large. Just 57% identify as Caucasian, compared to 64% of the general population.

Interestingly enough, ad-free only digital original video (such as Netflix and Amazon Prime) skews most towards Hispanics. Fully one-quarter (25%) of these video viewers are Hispanic, compared to 18% of ODV viewers and 16% of the US population.

Meanwhile, the audience for TV shows online is also younger and more diverse than the general population, but not to the same extent as original digital video viewers.

The results broadly align with MarketingCharts’ own research into media audiences. The latest edition of the US Media Audience Demographics study demonstrates that the online TV audience skews far younger than the internet radio or print website audiences.

Other Highlights

Some other notable findings from the IAB’s new reports follow.

  • Original digital video viewers are more likely than the general population to forego pay-TV, and use a larger number of streaming services on average.
  • Compared to the general population, ODV viewers are more apt to see themselves as fun-loving, creative, curious, adaptable and forward-thinking, among other personality traits.
  • The percentage of ODV viewers who watch weekly (86%) is almost on par with the percentage of online TV show viewers watching with that frequency (89%), though online TV program viewers spend more time weekly and are more apt to watch that content every day.
  • OTT devices – such as smart TVs and video streaming devices – are the most popular for watching original digital video, TV shows online and ad-free only digital original series.
  • ODV viewers most commonly become aware of this content by talking with others.
  • 84% of marketers and agencies surveyed at least somewhat agree that advertising appearing in original digital video is more engaging than TV commercials, and 80% at least somewhat agree that ads appearing in ODV are more effective than ads in other digital video content.
45th Parallel Design Ad

Explore More Charts.

Pin It on Pinterest

Share This