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The popularity of online video has exploded in recent years, fueled by the ubiquity of internet access and smartphones, the prevalence of video-driven social media platforms/networks like YouTube and Facebook, and declining TV viewership (especially among teenage and millennial audiences). Over 200 million people in the U.S. alone now watch digital video content (Statista), leading to a remarkable increase in online video marketing spending by top U.S. marketers and brands.
The following online video marketing statistics serve to illustrate how and why today’s best companies are investing in digital video advertising and help marketers make informed decisions regarding future ad spending.
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While total ad spending on online video is notable, the rate at which digital video ad spending has increased is even more impressive. From 2014 to 2015, digital video ad revenues increased by an astounding 46% and are expected to climb another 28.5% from 2015 to 2016 (based on digital video ad spending projections through 2016). Though the rate at which online video ad spending is predicted to lessen, eMarketer projects that investment in digital video ads will see double-digit growth through 2020.
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As audiences spend more time consuming digital video content, investment in online video ads has steadily increased to reflect new user behavior. U.S. spending on digital video ads is projected to reach nearly $10 billion in 2016, almost double online video ad spending in 2014. By 2020, eMarketer estimates that online video revenue will reach $16.69 billion, a 218% increase in only six years.
According to eMarketer, spending on online video ads in 2016 is expected to capture 19.7% of the total U.S. digital advertising revenue in the United States. The increase in online video ad budgets comes largely at the expense of investment in display ads, which decreased by 4% from 2015 to 2016. Spending on social media advertising is also up from 2015, increasing from 19.4% to 22.3%.
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According to a March 2016 survey of U.S. agencies and marketing professional, 63% of marketers responded that they will increase ad spending on desktop video ads and 62% said they would increase spending on mobile video ads in the next 12 months. To further illustrate the popularity of online video ads, the survey also found that around 34% of marketers plan on maintaining their current spending on online video ads, leaving only 3% that said they would decrease spending on digital video in the coming year (eMarketer).
As audiences spend more time on social media platforms like YouTube, Instagram, Facebook, and Snapchat, developing online video ads for social media platforms—either native ads or through influencer marketing campaigns—is now the most effective use of a brand’s advertising dollars. According to eMarketer, over 70% of U.S. marketers plan on spending money to create and/or boost the visibility of social video ads in the next 12 months. 65.8% of respondents said they would invest in Facebook video ads, while 42.3% said they would focus on YouTube video advertising.
Online video marketing can be a powerful selling tool, especially for young millennial audiences. A recent study of consumer behavior found that 80% of Millennials use some form of digital video when researching a product or service, and 70% of those surveyed said they watched company videos when shopping online. Furthermore, 74% of Millennials found online videos helpful when comparison shopping online (Animoto).
According to technology services firm Aberdeen, websites that include video content on landing pages see 41% more traffic from search compared to websites that don’t include online video. For companies that rely heavily on search to attract customers and/or clients, investing in digital video has the potential to nearly double the number of people who are likely to find a brand’s website.
The number of people who watch online videos using a mobile device has grown substantially in the past several years, with YouTube estimating the average mobile watch time is around 40 minutes per day. When it comes to helping users make a purchasing decision, online video advertising is particularly powerful—Think With Google recently found that 40% of users visited the store/website after watching a branded video on YouTube, and around 28% of those same people ended up making a purchase.
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New findings from Think With Google illustrate why a company’s online video marketing efforts must be mobile-compatible as well. According to Google’s survey, one-third of all adults under the age of 54 use their smartphones while watching videos online, and half of all respondents said they watched YouTube videos on their smartphones even while at home.
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Nearly three-quarters of marketers plan on using Google and/or YouTube for online video advertising, according to a December 2015 study conducted by eMarketer, making this outlet the most popular platform for launching digital video ad campaigns. Facebook video ads were popular as well, with 46% of marketers planning on developing digital video ads for Facebook in the next 12 months.
According to a study highlighted by eMarketer, the best length for a Facebook video ad was between 30 and 60 seconds. Video ads at this length saw completion rates of nearly 50%, while Facebook video ads that were less than 30 seconds were watched until the end just 26% of the time.
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