Digital Video Ad Spending to Explode by Over 250%

Consumer packaged goods (CPG) and health brands spend more on video advertising. 

Throughout 2011, CPG brands spent more than any other group on video advertising -- making up 24% of all dollars spent, according to new data from YuMe. Health and pharmaceutical brands came in second -- with a 16% share of the video ad market-- despite a 400% year-over-year increase in spending.

The 25-54 consumers were the most-requested demographic -- making up 15% of RFPs -- the video ad network found.  Females 25-54 were the most-requested female demographic in 2011, with 39% of requested RFPs.

Spending on non-gender-specific campaigns made up 66% of ad dollars in 2011 -- up from 55% in 2010 -- while spending on female-targeted campaigns made up 25% of ad dollars.

While still attractive to advertisers, requests for females 25-54 actually decreased slightly from 42% in 2010 to 37% in 2011, while requests for males 25-54 held steady year-over-year at 22%.
 Marketers should note that consumers ages 12-24 experienced the highest average video completion rate at 73%, although they had less spending power.

According to a recent estimate by Forrester, domestic digital video ad spending will explode by over 250%, from $2 billion in 2011 to $5.4 billion by 2016. The forecast was largely attributed to a renaissance in quality, brand-safe video content, a proliferation in video-friendly devices and the maturing of younger, online adept consumers.

Separately, although still in its infancy, the Connected TV market made up over 1% of impressions served during the fourth quarter of the year, while mobile impressions nearly doubled quarter-over-quarter to 5% of video ads served. But the dominant video advertising unit, pre-roll’s market share, continued to decline in 2011 from 93% in 2010 to 89% of ads served.

Per Forrester, 37 million U.S. households currently own a connected device that enables them to watch digital video on their TV screen -- up from fewer than 25 million in 2010. Among these connected households, younger consumers lead the way, outpacing the overall population in adoption by nearly 20 percentage points.

Forrester projects that connected device penetration will reach 50% in 2016, further opening the fragmentation floodgates of video consumption options.

In another finding, the majority of ad impressions that YuMe served in 2011 were in California at 11.0% of total volume, followed by New York at 7.9% and Texas at 6.8%.

YuMe bases its analysis on average video completion rates, regardless of pre-roll length. Targeted audience demographics are based on the audience targeted by the advertiser, as stated in applicable request for proposals. - Gavin O'Malley, MediaPost

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