Our advertising forecast shows that online video for marketing is big business and is only going to get bigger. In Europe, the CAGR for total ad spend from 2013 to 2018 is 2.19%, but for online video ad spend, it is a staggering 18.83%. The US shows a similar (albeit smaller) skew, with total ad spend CAGR of 4.49% and video at 22.39%.
Video, then, is a big deal, but most marketers aren't realizing the full potential of the medium. Approaches to video online are broader than simply grabbing 30 seconds from your TV commercial and sticking it on an online display network. Broadly speaking, there are three approaches to video:
Linear video — static. Pre-rendered content, where the video plays from beginning to end. It's just like TV adverts or the majority of video content marketing on the Web.
Linear video — dynamic. Where video content is customized per user or segment, often at run time. This approach interacts with consumers' data (e.g., social profile information) and/or context (e.g., location) but does not allow users to directly interact with the material when playing. A great example of this is one directed by Jason Zada and Jason Nickel from production company Tool and is called “Lost In The Echo,” which pulls in pictures from a user’s Facebook page, superimposing those snaps with photos that characters in the video mourn over.
Today, Facebook announced a new road map for its social advertising solutions. Over the coming months, Facebook will evolve its ad offerings to:
Focus on business objectives. “Do Facebook advertising” is not a business object unto itself. Social advertising broadly, and Facebook advertising specifically, is just one piece of a broader mix of options to reach new audiences. Facebook plans to help marketers align their spending to their business objectives by offering solutions specifically for brand marketers, online retailers, and other types of advertisers.
Make social ads more social. Facebook’s data shows that ads on its site work better when they contain a social component (e.g., ‘your friend Nate likes this brand’) — so soon, all Facebook ads will contain social elements by default. This is part of a larger trend to make social advertising more personal than traditional display advertising.
Simplify its advertising options. As Fidji Simo, Facebook Ads Product Manager, said today, "it should be simpler." Today, Facebook offers a veritable Chinese menu of ad units that frankly confuse most marketers. To simplify ad buying, Facebook plans to slash its existing number of ad units in half to create a simpler ad-buying experience.
By 2016, advertisers will spend $77 billion on interactive marketing – as much as they do on television today. Search marketing, display advertising, mobile marketing, email marketing, and social media will grow to 26%35% of all advertising spend within the next five years.**
What does this growth mean for you?
1) Interactive media has gained legitimacy in the marketing mix. In past forecasts, we found that interactive budgets grew because of marketing experiments, or firms looking for lower-cost alternatives to traditional media. No more. The next five years of growth comes from bigger interactive teams spending sizably to bake emerging media into their strategies for creating rich customer relationships.
2) Search’s share will shrink. Search marketing (paid search and SEO) will continue to own the largest portion of the interactive marketing pie. But its overall share will decline as marketers shift search spend into biddable display investments, mobile marketing, and even social media.
3) Display media will rally. Bolstered by advances in audience targeting and bid-based buying approaches, advertisers will renew their love affair with display media. We expect display investments to grow as marketers apply display instead of search. And niche or remnant inventory sells for higher prices due to demand-driven pricing.