The video ecosystem is healthier than ever with linear TV and video ad spend outpacing eMarketer’s earlier growth projections and quickly moving toward full convergence. According to its Q1 2019 Digital Video Trends report, 2018 ended with TV ad spend at a net gain, and digital video expected to hit $36 billion—up $2.5 billion from last year’s forecast. In addition, the current 2:1 spend ratio is expected to close by 2023 with TV maintaining its $70ish billion spot and video growing to $58.39 billion.
This is the fourth time in two years that eMarketer has upped its outlook, a reflection of the value advertisers see in all paths to consumers. “The video expansion is not an either-or proposition,” Andy Sippel of Advertiser Perceptions said about its recent study on convergence. “Advertisers are expanding their investment to follow engaged viewers onto as many platforms as possible.” Here are some insights into how advertisers are fueling convergence and a look at the associated creative asset workflow mandates.
All Engines Go, Including TV
These increases are driven largely by gains in mobile video, connected TV and social video. And, of course, linear TV. TV ad spending was up by 3.1% in 2018, finishing the year at $72.4 billion instead of the nearly $70 billion eMarketer had projected. Political spending around the U.S. midterms was the main driver behind the increase, along with the winter Olympics and the World Cup. The 2020 election and Summer Olympics will keep TV ad spend steady for the short term.
For the longer term, the Advertiser Perceptions study notes that most advertising executives continue to utilize linear TV advertising for upper-funnel functions like generating awareness and positioning their brands and they don’t readily see how that scale will be easily replicated. Answering that question will be top of mind for broadcast advertisers as cord-cutting continues.
Streaming and Connected TV Aim to Increase their Profiles in a Crowded Market
Ad-supported streaming services, including Hulu and Sling TV, posted significant gains in their ad businesses in 2018. On the subscription front, Hulu and Netflix ended 2018 with increased audiences and higher prices on some of their plans. But Mike Bloxham, an SVP at Magid, told MediaPost that the popularity of the programming means cost increases won’t put off customers. Interestingly, both models of streaming invested heavily in TV advertising to grow awareness in an increasingly crowded marketplace.
As streaming platforms grew their ad businesses, the share of connected TV ad impressions increased to 44% of the total in Q4 2018, up from 15% a year earlier, according to Extreme Reach’s Video Benchmark data cited in the eMarketer report. And there’s more growth in the CTV/OTT universe ahead as Disney, AT&T and Amazon launch new services that will add 53 million U.S. subscribers and $3.6 billion in subscription revenue by 2023. There’s little question that brands will join in. The challenge for marketers will be in deciding where to invest out of a dizzying array of OTT services and streaming-ready hardware.
Managing Complexity with Workflow Efficiency
With more pathways to consumer attention than ever, the demand for purpose-driven creative, delivered through a growing number of evolving video channels is growing exponentially as creative everywhere proves increasingly essential for brands trying to stand out from competitors. And that need for more creative, in more formats for more platforms, coupled with the increased complexity of the media market has advertisers turning more frequently to advertising technology in general, and creative asset workflow solutions in particular for managing the new landscape. With ER’s AdBridgeTM creative asset management platform, marketers can be assured that their creative will be delivered to the right platforms, in the right formatting at the right time and in compliance with Talent & Rights requirements.
As Jeff Lucas, Head of Americas Sales at Oath, wrote in AdExchanger, TV and digital will only continue to assimilate, based on consumer behavior. It’s up to agencies, brands, publishers and tech providers to work together to create more holistic workflows for managing the transition.