U.S. adults now spend nearly six hours per day watching video. It’s the medium where consumers eyeballs are glued, and it’s not showing signs of slowing, as tech behemoths like Facebook, Amazon, and Google continue to invest in video-first features and properties.
For marketers looking to capitalize on the video boom, Street Fight has the latest from GroupM’s second annual State of Video report. The highlights include continued difficulties with measurement, emerging options to target effectively across channels, a look at Amazon and Facebook’s quest for domination, and social video’s fallibility and how brands can overcome it. Below are the details.
Hitting the Right Audiences is a Challenge, but the Tools Are Out There
The approach to video advertising must change to capture the new forms of audiences opened up by OTT. This means rethinking whom video is reaching and accordingly how ads should be priced so that they still present suitable ROI for brands.
“In 2018, we are in limbo between the traditional and the modern. We have a choice: Force-fit digital video into linear mechanisms, systems and pricing structures, or modernize television to look more like digital—targeted, automated and optimized.”
How will brands find vendors capable of taking on this challenge? What’s the key to doing so?
While it’s challenging to make sense of diffuse audiences across linear and digital video, there are already tools on the marketer that are taking up that task, the report indicates. Only a fraction of digital video inventory is currently programmatic. It will take an omnichannel programmatic strategy to remain on the cutting-edge of video advertising going forward.
Linear TV Freezes; Amazon and Facebook Forge Ahead
There’s been no innovation to suggest that linear TV is going to make a grand turnaround and conquer upstart channels. Even the most popular programming is suffering a decrease in viewership. However, linear TV is not disappearing. It’s just taking a smaller role in consumers habit that tend to integrate various forms of video viewing.
As for the new forms, Amazon and Netflix are ramping up original programming to complement the roughly two-thirds of their programming budgets that already appear to go to acquisition and sports streaming. Google’s YouTube remains steady (despite some lingering brand safety concerns), and Amazon is in position to take a huge chunk of the video ad market going forward. This is not about Prime Video, where ad spots are scarce; it’s about the DSP Amazon has set up to allow brands to serve ads programmatically to the platform’s click-happy and resource-rich users.
Facebook and Apple have shown interest as well, with the latter playing the long game while the former foregrounds Facebook Watch. There’s no data available on just how effective Facebook Watch has been, but the company announced this week that the channel will be a central part of its advertising strategy going forward. Still, the main draw at Facebook remains Instagram, which is continuing to boom as Facebook growth slows.
Are People Actually Watching Video Ads?
Not necessarily. The data shows that video completion rates leave much to be desired on social channels. The upshot, GroupM suggests, is that brands should pursue a performance-based advertising models or stick to shorter videos.
“It is uncommon for feed users to watch all of a 30-second or even 15-second ad. The effective cost of capturing such views is therefore tens or even hundreds of times more expensive than TV,” the report indicates.
Vendors can blame this on advertisers who don’t want to resort to short videos that consumers will actually watch. And advertisers can keep plastering cheap social inventory with videos that may or may not be working. But performance and short videos are paths to a safer strategy.
Joe Zappa is Street Fight’s managing editor.