YouTube Concerns Will Boost The Long-Run Outlook For Online Video Ad Spend

Poor quality inventory and lack of transparency are problems for the digital ad industry. My colleague Susan Bidel and I have recently published reports that show how the related problems of fraud and lack of viewability result in wasted spending by marketers and a lost revenue opportunity for quality publishers. For further detail, clients can read Forrester Data Report: Ad Fraud And Viewability Forecast, 2016 To 2021 (US) and Poor Quality Ads Cost US Marketers $7.4 Billion In 2016.

While not an issue of ad fraud or viewability per se, recent concern over YouTube ads represents another facet of the ad quality problem. In the past couple of weeks, large marketers like AT&T, Verizon, and The Guardian have pulled their ads from YouTube after discovering that these had been displayed alongside video content promoting terrorism and hate.

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The Data Digest: Online Video Ad Spending Is Set To Make A Splash In 2017

Up until now, paid services like Netflix, Amazon Prime, and HBO have dominated US online video viewing, particularly for long-form, TV-style content. Uptake of ad-supported, TV-style online video has been slower; traditional TV providers control much of this content, and they’ve been cautious about making their programming available outside the lucrative TV bundle. Even if many viewers want to cut the cord, they may not follow through as they realize they cannot get all the content they want. YouTube, of course, has a massive ad-supported online video business that has been growing healthily according to our calculations. However, even YouTube falls short of Netflix in terms of downstream bandwidth consumption, and its estimated ad revenue is only a small fraction of traditional TV ad revenue. For online video ad spend to show meaningful growth, consumer-generated or web-only content won’t be enough. A truly robust online video ad market will require the migration of traditional TV content to digital platforms.

This migration appears to be gathering momentum. Recently, we have seen a number of developments that could drive the uptake of ad-supported online video and that indicate that 2017 could be the year when ad-supported online video starts to make a splash.

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Understanding The Global Digital Marketing Landscape

Welcome to my blog!

I joined Forrester earlier this year as an associate forecast analyst on the ForecastView team, focusing on digital marketing (DM) topics. The ForecastView team’s goal is to answer the questions “How much?” and “When?” To this end, we publish five-year forecasts that provide forward-looking, quantitative guidance around the key issues that our research analysts are discussing as well as the important trends that Forrester’s Technographics® survey data reveals. To learn how our forecasts can help you with your investment decisions, see our ForecastView overview.

On the DM forecast team, we evaluate various facets of the digital marketing space, including online display, online video, social media, paid search, email marketing, mobile advertising, and ad tech.

Our latest report, the Forrester Readiness Index: Digital Marketing, 2016, touches on many of these areas. In it, we quantify the digital marketing readiness of 55 countries across six continents based on data collected for 23 variables — ranging from display, search, and social ad spending to per-capita online traffic and video consumption to penetration rates for PC, smartphone, internet, and broadband usage to GDP growth, number of businesses, and the percentage of businesses selling online. It provides one of the most comprehensive and digestible evaluations of the global digital marketing landscape available in one place.

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