As TV Ad spend dwindles, Online Video Advertising Skyrockets

Online Video Advertising YouTube Dude Perfect Nike

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3 Reasons Why Brand Ad Spend Increased 43% For Online Video Advertising In 2015

In a recent study, digital intelligence firm L2 discovered that brand spend for online video advertising and platforms increased 43% in 2015. Similarly, L2’s study also found that brand ad spend for social increased 42.5%. The brands studied preferred to advertise on YouTube (nearly 60% of brand interactions), Instagram (35%), and Facebook (6%). For greater detail on L2’s study, check out coverage from StreamDaily.

Here are 3 reasons why brands are spent significantly more on online video advertising in 2015 and why this increase will continue to escalate in 2016:

1. Declining TV Viewership Statistics & Trends

In contrast to online video advertising spend’s 43% increase, TV ad spend grew by 2.6% in 2015 (Tubefilter). In a span of 4 months (September 2014 to January 2015), TV usage amongst Millennials fell 10.6% — previously, TV viewership for this demographic had declined 4% season to season last year (Time).

For more detail on TV’s declining viewership, check out our article “Digital Media Taking Billions From TV” here.

2. Everyone Is Positioning For Curated Online Video Experiences

At CES 2016, YouTube’s Chief Business Officer Robert Kyncl noted that “app makers and publishers, from Snapchat to the New York Times are all investing in making video a core part of their experiences, accelerating mobile video consumption.” As TV viewership for many demographics continues to wane, time spent on online video is rapidly increasing: YouTube reports that the number of users who frequent their homepage (similar to turning on a TV) is up more than 3X year upon year. For the first time, audiences are consuming their media content entirely online and in a manner completely different than previous generations (“cord-nevers” vs. “cord-cutters”). As such, top social media channels and publishers are increasing their video viewing offerings.

2015 saw many notable online video developments: Facebook launched their video auto-play, visible video view counts, an embedded video player, and an initiative to split video revenue with content creators. Both Instagram and Twitter debuted hyper-lapsed and promoted video ads with Twitter also enabling native video uploads. Live video streaming apps Meerkat and Periscope both launched in 2015.

3. Growth, Reach, And Engagement On Social Platforms

While TV audiences are shrinking, the top social platforms are experiencing high levels of growth: YouTube’s video platform reaches close to a third of the world’s internet population. Additionally, YouTube reaches more 18 to 49-year-olds than any U.S. cable network. Instagram hit 400 million monthly active users in 2015, and Snapchat (reaching 60% of all U.S. 13-34-year-olds) has over 100 million daily active users.

At the tail end of 2015, Snapchat reported daily video views of 6 billion, closing in on Facebook’s 8 billion video views (WSJ). In his CES 2016 keynote, Kyncl reported that 400 hours of video are shared on YouTube every minute. Top YouTubers and popular social media stars are spearheading online video growth across all social channels and platforms. Many top YouTube influencers and video creators are driving millions of views per video and concurrently generating massive social engagement.

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