2011 Report: Video Ad Budgets Will Rise Incrementally

Seventy percent of display video advertisers will increase spend in 2011, but budget shifts do not appear to be profound, according to research from Break Media. On the latter issue, 79 percent of surveyed advertisers said they will allocate less than 25 percent of their total online display ad budgets to display video advertising next year. Sixty-three percent of advertisers said the increase will be funded from TV budgets, while 70 percent said it will come from online budgets.

The Los Angeles-based ad network recently polled a mix of 350 marketers and agencies. It found that 75 percent of agencies plan on increasing video ad spend, compared with 61 percent of marketers. According to Break Media, verticals where video ad buying will increase span automotive, baby/parenting, casual dining/quick-serve restaurants, alcohol, local, non-alcoholic beverage, packaged foods, retail, and cosmetics/toiletries.

Yet 35 percent of those surveyed said they did not use video ad networks for campaigns this year and do not intend to do so during 2011. Instead, they buy video-based promotions directly from online publishers of TV show, sports, movies, and gaming content.

When asked about the relatively high number of ad buyers going the more independent route, Andy Tu, VP of marketing for Break Media, said video networks offered scale that the publishers did not. At the same time, he said, “Publishers have done a compelling job of proving to advertisers that their video advertising will run adjacent to professionally produced content.”

Marketers and agencies were also polled about their online video advertising challenges; and targeting, metrics, and cost were cited as their top concerns. Also, advertisers said better ROI in addition to more easily measured ROI would encourage them to spend more in the space. Transparency of ad placement ranked as another major concern.

Tu said, “It’s because [our industry is] not using standardized metrics that people are having a hard time measuring ROI… I think it goes back to publishers working more closely together.”