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As online video budgets increase – is the industry chasing short-sighted gains?

Author: Kristanne Roberts, Global Development Director – Digital, Kantar

Now a €7.6bn European market, digital video advertising adoption continues to grow year on year. With more formats and sites offering digital video formats than ever before, it’s an attractive channel to advertisers and their agencies.

For advertisers the formats are an effective way to drive brand equity measures such as awareness and image associations.  The industry recognises the potential to deliver effective incremental reach when combined with TV advertising, according to the latest IAB Europe Attitudes to Digital Video Advertising Report.

It stands to reason then that with an increase of 35% in industry investment (2016-2017) according to the report, publishers have also stated a significant increase in their digital video inventory. With almost a third (28%) of those surveyed stating that over 81% of their advertising inventory is dedicated to digital video, compared to just 16% in 2017.

Within this inventory there has unfortunately been a shift away from consumer control, with a growing percentage of online video formats being non-skippable and 40% of publishers now indicating that over 80% of their video inventory is non-skippable.

This is the opposite of what consumers want – which is ultimately more control over the advertising they consume. In our Kantar AdReaction study we found consumers have much stronger preferences for skippable formats, or those with a co-creation element (e.g. voting options or choosing the ending) where they have more control over the content.  This applies particularly when it comes to the younger Gen Z audience.

This shift to non-skippable formats could risk brands damaging their long-term brand equity, as the industry chases the short term increases in impact driven through forced consumption of ads, neglecting the potential irritation this can cause. This is a concern since videos are not always designed with the online environments in mind.  Although the situation is improving, still almost 20% of advertisers admit to using repurposed TV content for mobile video, which Kantar studies have shown can damage campaign potential.

All is not lost however, as we can see there are clear benefits to online video formats in the cost-effective incremental reach they deliver, and the strong contribution to brand equity they can drive when executed well.

The key then, will be in ensuring the online video content created is engaging for audiences, and integrated well with the broader campaign.

For more info, you can read the full IAB Europe Attitudes to Digital Video Advertising Report 2018.

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