| by The Trade Desk

Three reasons video advertising will continue to dominate 2016

As the old saying goes, money follows eyeballs, and all eyes are on video in 2016. After an explosive year of growth for video content, it’s becoming clear this surge in popularity shouldn’t be dismissed as a phase. In fact, according to Cisco, video is predicted to account for 80 per cent of global internet traffic by 2019. High CPMs won’t slow video’s steady incline, either. As eMarketer predicted UK programmatic video ad spend will reach $1.66B (11.3 per cent of all spend) this year.

Aside from its enormous potential, video advertising has also earned some negative attention for its flaws in viewability and fraud. While some argue that the record flow of cash into video advertising is misguided, this increased investment is still validation of video’s potential as a powerful advertising medium. As a direct result of this investment, buyers and sellers are working together to swiftly find the solutions the industry desperately needs.  

We’ve come a long way, but the road is still long ahead. It’s important to continue to improve the quality of metrics for video ads. As we progress into a video-dominated 2016, three factors will help drive the conversation forward.

1. Online video ads are powerful engagement drivers

Technology’s made it less expensive to produce video content, making it more accessible for brands everywhere. Video ads are powerful, too. When Demand Metric surveyed marketers and agencies in 2014 for example, 71 per cent of respondents said their video conversion performance was better than other media. Additionally in the UK, eMarkerter reports video CTR in H1 2015 outperformed standard banner display ad CTR 0.34 per cent to 0.11 per cent.

Display isn’t the only medium online video trumps. IAB and Nielsen found that online video ads blow TV ads out of the water in a number of categories – a fact poised to stay the same until TV fully embraces the programmatic marketplace.

Because it engages multiple senses, video can be a more immersive advertising experience than display, creating a more engaging experience for the target audience.

2. Viewability is improving

Following the improvements made in display viewability, the focus is now shifting to video. For good reason, too. In Q3 2015 Integral Ad Science reported 68 per cent of video ads in the UK as non-viewable. Yikes.

Don’t start frantically shifting your video budget just yet though, things are already looking up in 2016. Initiatives by companies like Moat and organizations like Open VV are helping to improve and standardize video viewability. Metrics like in-view percentage, completion percentage, percentage of video played in-view, and fully on screen percentage have already gained positive momentum this year.

The key is to continue to talk about it in a transparent way.

3. Native has entered the programmatic video ring

Social media brands, like Instagram and Snapchat, are betting big on both video content and native advertising. For marketers, there’s no doubt the potential is huge.

For instance, Michael Kors recently helped debut Instagram’s video advertising program in the UK. Snapchat plans to open up its API this year to hasten a self-serve ad marketplace. Facebook’s bet on an immersive virtual reality video experience teases a rich future for native video advertising.

These are major steps forward for native video advertising. Coupled with better engagement and the focus on viewability improvement, native is poised to drive video advertising forward in big ways.

James Patterson, GM, UK, The Trade Desk

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