Tech ad spending to reach $4.7 billion by 2017; Turns to Mobile, Social and Video

Despite slow growth, $3.21 billion will go toward digital ad spending in 2013

 Digital advertising spending by the US computing products and consumer electronics industry hit $2.83 billion in 2012, and that figure will rise to $4.66 billion by 2017, according to a new eMarketer report, “The US Computing Products and Consumer Electronics Industry 2013: Digital Ad Spending Forecast and Key Trends.” Though industry revenues are experiencing slower-than-average growth, the industry’s top advertisers are focusing their marketing dollars on big-budget campaigns for their fastest-growing products: tablets, smartphones and other “smart” devices.

eMarketer estimates that marketers in the computing products and consumer electronics industry will invest 57% of their paid digital dollars in direct-response formats this year. Branding-focused efforts will make up the remaining 43%.

Targeted advertising in mobile, video and social formats is growing particularly fast as marketers redouble efforts to one-up competitors and establish themselves as undisputed technological leaders.

During the past several years, paid mobile advertising for tech-related products and services has surged, both in the US and globally. Millennial Media reported that tech industry spending worldwide for 2012 surged 294% year over year in Q3 2012, and the sector was responsible for 3% of total campaigns on the source’s network last year.

In addition, many tech firms have successfully seeded social video ads that have gone viral. Social video marketing firm Unruly Media reported that the tech industry accounted for 17.8% of the online social video ads shared on its platform in Q2 2013, up slightly from 17.0% in Q1 2013.

These efforts have helped digital video earn its place as the rising star among digital display formats. According to several industry experts, some marketers currently spend up to 20% of their digital ad budgets on online and mobile video ads. And as more inventory and more ad targeting capabilities become available, this percentage is likely to grow.

Industry marketers have also been hard at work on social networks, developing their presence as interactive hubs of brand and product information. A November 2012 study by research and strategy firm BrandSpark and Better Homes and Gardens found that electronics manufacturers were among the top 10 company types that US internet users followed on Facebook.

As marketers beef up these owned and earned presences, they are also devoting more budget to paid social network ads to make their carefully developed content more discoverable. “We have paid media on both Twitter and Facebook,” said Liya Sharif, senior director of global marketing at Qualcomm, and her company is using it to support its custom programs and in concert with other multichannel efforts. “It’s becoming important in two areas: for acquisition of fans and followers, and for engagement,” she added.



More than 80% of marketers use videos on their own websites

In recent years, the costs of video production have dropped tremendously thanks to digital technology, while the barriers to distributing video content have also fallen, owing to the internet. Those two factors have likely hastened the adoption of video marketing, which is now near-ubiquitous among US senior marketing professionals, according to a survey conducted during Q2 2013 and Q3 2013.

The poll found that 93% of marketers had used video for online marketing, sales or communications purposes at some point during 2013, up from 81% in 2012. Another 3% said they had not used video in 2013 but were considering doing so.

The growing importance of digital video marketing is also reflected in the number of dollars marketing professionals are allocating to the channel. The poll found that 70.5% of respondents expected their outlays for video to increase in 2013 over the previous year, while 14.6% indicated that budgets would remain static. Just 1.3% foresaw a drop in video marketing budgets for the year.

Marketers are also taking advantage of a number of content delivery platforms in order to get their videos in front of an audience. While the website was the most popular destination for video content, used by nearly 84% of respondents, almost two-thirds tapped YouTube to post videos. Social media platforms were employed by close to 62% of respondents, while around 60% of those polled sent videos via email.

The report also found that user-generated videos were contributing to the increasing number of overall videos produced and disseminated on sharing sites and social media platforms. But it concluded that these types of videos were less effective as marketing tools than professionally produced videos with higher production values.

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Video Ad Spending: Moving From TV To Online

Video is the fastest-growing digital ad format according to eMarketer. US digital video ad spend is expected to rise by 41.4% this year and by nearly 40% next year as well, when outlays will reach $5.7 billion.

Findings from the Interactive Advertising Bureau (IAB) show that much of that increased digital video spending will come out of former TV budgets. Seventy percent of buy-side US senior executives told the IAB they would likely move TV dollars to digital video in the coming year. An even greater 75% of all US senior executives surveyed said the same, suggesting there is significant excitement around digital video from all corners. However, those on the buy side may be slightly more realistic about how budgets will really move.

As to which digital video ad formats would likely see the biggest bumps in investment, an April 2013 study from Be On, a division of AOL, found that 73% of marketers polled worldwide expected to increase spending on pre-roll ads over the next 12 months. Social video ads came in second, at 53% of respondents.

Putting dollars to digital video, though, does not have to mean leaving TV behind, and there are increasing opportunities for cross-platform ad campaigns, something marketers seem particularly excited about.

According to the IAB, nearly two-thirds of respondents who had previously launched cross-platform ad buys seemed happy enough with their results that they said they would increase their budget for combined TV and digital video buys going forward.

Online video, social driving huge gains in online advertising

Online video, social driving huge gains in online advertising

A new report from Strategy Analytics is forecasting global online ad spending will exceed $100 billion in 2013, driven primarily by spending on online video and social media.

Overall ad spend in 2012 was estimated at $462 billion, SA said, an increase of 3%. The research company said it expects spending to grow at least another 4% in 2013, and cross the $500 billion mark by 2014.

Total online spending is forecast to top $102 billion this year, an increase of 14%, and make up more than 20% of the total global ad spend.

Online video is the fastest growing segment of the market, SA said, with year-over-year increases of 38% globally. Spending in the segment has more than doubled over the past four years.

Online video ad spending in the U.S. is expected to increase 31% from 2012 to 2013, Europe could rise 35% and Central and Latin American (CALA) spending is expected to increase 55%.

“By 2018 we expect online video advertising will represent around six percent of annual spending on TV advertising,” analyst Leika Kawasaki wrote. “The longer term growth story for online video advertising is one of the most exciting in advertising. The key issue is where will the growth come from: will spending transfer from TV or will it be incremental to existing spending?”

Kawasaki said online video advertising revenues remain a fraction of TV advertising.

“The 30-second slot remains unmoved by the numerous online formats emerging and represents a single, monolithic spending format compared to the relatively fragmented state of online,” Kawasaki said.

SA said the online advertising market surpassed $30 billion in 2012, and forecast an increase to $35 billion in 2013.

The researcher said it expects dramatic growth to continue in CALA over the next five years as the market takes advantage of the 2014 World Cup and 2016 Summer Olympics.

Internet ad sales reach new high of $9.6 billion

Ad revenue from digital advertising in the U.S. shot up almost 16 percent in the first quarter compared with the year-ago period, according to the IAB.

(Credit: IAB)

Revenue generated by online advertising hit a new record in the U.S. last quarter.

Total first-quarter sales hit $9.6 billion, up 15.6 percent from the $8.3 billion seen in the first quarter of 2012, according to the Interactive Advertising Bureau and PricewaterhouseCoopers. The latest numbers reflect an ongoing shift to Internet advertising on the part of marketers as revenue continues to grow by double digits.

“Consumers are turning to interactive media in droves to look for the latest information, to connect with their social networks, and simply to be entertained,” IAB CEO Randall Rothenberg said in a statement. “This first-quarter milestone clearly illustrates that marketers recognize that digital has become the go-to medium for all sorts of activities on all sorts of screens, at home, at the office, and on-the-run.”

The numbers are based on data from the IAB’s Internet Advertising Revenue Report, which is conducted independently by the New Media Group of PwC. The report captures information directly from companies that sell digital advertising online.

Video Content Drives Social Engagement and Gains Ground on Mobile [Report]

A new report from Adobe shows the formidable impact that video content is having on our online viewing habits and how publishers and marketers can benefit from this upward trend by understanding what the public wants. The U.S. Digital Video Benchmark 2012 Review, which draws its data from just under 20 billion video starts on media websites as well as 10 billion videos ads served by Adobe media customers alongside 450 million Facebook posts, states that video content has twice the social engagement of text, links and static images. Not only is the medium finding success on social network sites, the report finds that mobile video views increased by a staggering 300% in 2012, and accounts for 10.4% of all video starts.

Adobe even made a video of the report so let’s take a look at that first for a quick overview:

Mobile Video

Although viewers in the US still continue to watch the majority of the video content via their PCs, consumption via mobile devices increased significantly last year. Mobile video views are up by 300% which makes up 10.4% of all video starts.

Video Content Drives Social Engagement, Gains Ground on Mobile [Report]

Video viewing via tablet devices tends to peak at the weekends and is driven by longer form content such as sports, films and TV shows. Mobile viewing habits tend to favour video consumption on a Monday, Thursday and Sunday and revolves around “content snacking” of shorter video clips.

Video Content Drives Social Engagement, Gains Ground on Mobile [Report]

Social Media

In 2012, video social engagement rose from 42% to 70% the year before with the viral reach of video content (the number of people who discover a video via a friend or a brand they follow) accounted for 77% of ALL reach via social networking sites. That compares to 55% for non-video content. Adobe found that this type of video also has a much higher completion rate. People are taking the time to watch the whole thing if the recommendation has come via their social circle.

Facebook still has the lead when it comes to these social referrals but Twitter is three times more likely to generate referral traffic for videos than other types of content such as text links or images.

Video Content Drives Social Engagement, Gains Ground on Mobile [Report]

Some other key findings:
• Digital video consumption has grown 30% year over year in Q4 2012.
• From Q3 to Q4 2012 alone, video consumption grew 13%.
• There has been 50% growth in video streams since Q1 2011.
• New TV and sports content drove the highest growth in video streams in Q4 2012.

You can download the report from Adobe here for further information on last year’s video trends in content and advertising.