Video ad spend soaring in 2019, favoring original content, programmatic buys

Digital video ad spend continues to climb, with advertisers reporting that they expect to spend, on average, $18 million in 2019, up from $14.2 million in 2018, according to a new report from the Interactive Advertising Bureau (IAB). Research indicated that more than half of digital video ad spend will be driven by video ads featuring original content. And what’s more: eMarketer anticipates programmatic video ad spend to reach $29.24 billion this year, accounting for 49.2% of all US programmatic digital display ad spending.

Original digital video. Annual spend on original video ads is expected to grow 31% from 2018, gaining share over other types of video spend. When surveyed, respondents indicated that content quality is the dominant factor considered when allocating video ad budgets – but it’s also the biggest hurdle impeding spend increases.

The core benefit of advertising with original video content, according to the report, is the ability to serve up custom creative in the form of high-impact branding and prominent placements. Increased targeting options, custom product integrations, and a “less cluttered” ad environment were also factors contributing to the uptrend in original video ad spend.

The rise of programmatic video. When it comes to the ways in which video ads are being served, programmatic placements continue to rise in 2019. Digital display ads are expected to make up 49.2 percent of total programmatic buys in the U.S., according to eMarketer.

For programmatic video, ad spend directed at mobile is predicted to eclipse spend on desktop and connected TV only slightly in 2019. However, mobile share is estimated to grow to 53.9 percent in 2020.

The report indicated that incremental growth in programmatic video spending can be tied back to connected TV, over-the-top (OTT) video and social video advertising.

Why we should care. From mobile video to over-the-top (OTT), audiences are consuming digital content at a higher rate than ever before, prompting marketers to focus on developing engaging video content and more efficient buying mechanisms.

As a format, video advertising and its growing investment marks a clear signal to marketers on where to focus ad dollars. But as video continues to permeate the digital ad space, advertisers should also recognize the value in content that amplifies their brand and closes the gap between aggressive marketing and organic appeal.

The industry’s mounting investment in original video ads proves that unique content does what hackneyed content can’t – which is to connect consumers to brands in new and engaging ways. Likewise, the uptick in programmatic buys for video points to greater perceived efficiency – and likely greater ROIs.

Correction: An earlier version of this story mistakenly identified $18 million as the total video advertising spend, and not the average per advertiser. We regret the error.