Digital video ad spend is surging—4 strategies to ensure further growth

This month, a stunning number of digital video dollars were up for grabs at the IAB NewFronts. According to the IAB Video Ad Spend Report, digital video is expected to grow to $63 billion in 2024. The business is thriving, but this isn’t the time to take a victory lap. We find ourselves yet again at an inflection point, and what we do now will have implications for decades to come. To get ready for the next phase of growth, we need to look at things that appear to be opposites but can both be true. New operating models vs. old standards Automation and data are helping to convert CTV buying practices from direct insertion orders to programmatic buys. The IAB spend report indicates that nearly all buyers are at least maintaining their activation via programmatic and half are increasing it. Are we ready? Media measurement blog Tracking TV, social and digital updates Click here We need to close the chapter on old standards. We are moving from exclusively using panel-based data for understanding impressions delivered on the biggest screen in the house to using panels plus big data to understand viewing. This is a major change in how we work, and one that directly challenges some of the most foundational standards in our industry. Should “opportunity to see” still be our benchmark? Does 50% of pixels in view for 2 continuous seconds still make sense in a world of automatic content recognition and new viewing habits? And what is the future of unified identity in a privacy-first future where IP addresses are obfuscated and third-party cookies are gone? The industry will need to adopt a portfolio approach including first-party data matching, contextual targeting, seller-defined audiences, differential privacy techniques, retargeting and more. How will we measure success? As we move into a multicurrency world, it’s not enough to be innovative—we also need to be credible and methodologically sound. There’s lots of important work ahead. Scale vs. fragmentation Digital video’s rise has been driven by a more engaging and less interruptive experience. Consumers love it. But as advertising-based video on demand (AVOD) and free advertising-supported streaming television (FAST) channels evolve, let’s not recreate a bad user experience that crams 20 minutes of non-programming time into every hour. Of course, AVOD and FAST channels need profits. But let’s resist the lure of over-commercialization and work to develop new forms of integration and consumer engagement. Frequency management also requires the strength of the industry to tackle. Delivering viewers the same commercials over and over is simply unacceptable for a medium this advanced. IAB and IAB Tech Lab have several workgroups pushing for solutions. Advertisers want to spend more on digital video. But they also want us to get it right. Hollywood vs. creators If you haven’t embraced the creator economy, you are late to the party. It’s currently valued at $250 billion by Goldman Sachs, is expected to nearly double to $480 billion by 2027. It has redefined the content landscape so that now both Hollywood content and creator content play a critical role in brand and performance marketing. Regardless of where the content originates, prime time is personal. Great, engaging content is in the eye of the beholder. Fragmentation has become a real problem for the industry, and the contraction and consolidation we’ve started to see over the past year—even when it’s tough—is healthy for the industry. We’ll likely see more of it this year. For consumers, there are more amazing shows to watch than ever, but it’s too hard to find them. See all of Ad Age’s 2024 Creativity Award winners here Old workflows vs. new AI tools While we have long been an industry on the cutting edge of culture, we have not been as progressive in adopting new AI-driven workflows. The old business models have taken us as far as they can. We must leap into a privacy-led future so that an open and free internet will continue to thrive and evolve. If you’re afraid to make the leap, AI will soon give you a helpful shove. The future doesn’t care whether you’re ready for it. All the work ahead isn’t daunting—it’s energizing. When the IAB NewFronts started in 2008, digital video was barely a footnote, literally the smallest slice of digital—3% of the revenues. We knew then that digital video would be a much bigger business, but we also knew that we’d have to face the challenges ahead, roll up our sleeves and get to work. Now it’s time to do it again. Because while digital video has triumphed, it’s also still at the beginning. Check out the latest Ad Age events and award programs

Digital video ad spend is surging—4 strategies to ensure further growth

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