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Rise of programmatic video advertising and shifting of ad spends from TV to Video & OTT




With the increasing shift of consumer choices towards mobile and other new forms of screens such as connected TV, VR and various OTT platforms there is a radical shift on how 21st century users want to consume content thus giving a rise to programmatic video advertising on these emerging platforms and devices making advertisers around the globe to shift their focus from TV to Video & OTT based advertising.

In this article we will look at some of the most contributing factors on this advertising landscape. Why choose video over other forms of advertising and how brands can play with different kind of strategies to deliver great advertising experiences to users in a targeted and personalized manner.

The Contributing Factors

The rise of video advertising can be related to several factors and more importantly below:

  • The rise in consumption of video content in social media and other platforms
  • The penetration of broadband and 4G LTE internet among masses in developing countries
  • Increased on-screen time shift from TV to mobile & other OTT platforms
  • Change in user preferences to multiple screen environments
  • User behavior towards on how they want to consume content and take full control over content consumption
  • "Make every screen a TV" an approach widely followed by the present generation especially Millennials.

Importance of Video advertising

Video advertising is part of the digital journey called as brand story building, marketers should look it as not just another channel or above other channels but as an integrated form of advertising connected with all other channels. Today consumers want to consume content irrespective of the device they are connected to, the top video and content players in the industry such as Netflix, YouTube, Facebook, Hulu, Hotstar and various OTT platforms all deliver seamless flow of video content irrespective of device consumers are watching in.

The below study from Zenith on its Online Video Forecasts 2018 gives a brief look on how marketers are going to spend their advertising dollars in coming years with digital and online video already surpassing TV advertising budgets which will struggle in terms of growth rate in coming years.

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From merely 2 billion $ in advertising spend in mobile video landscape, it may shift to over 30 billion $ by 2030 which is not only a huge jump, but a radical shift on how media is getting consumed worldwide. The penetration of 4G LTE internet to masses mainly in developing countries where not even broadband or other internet forms ever flourished, is much to give credit for this radical change as well as the changing consumer choices around the globe to make mobile their primary screen of content and media consumption.

According to a recent study from IHS Markit report published in June 2016, there are already 13 connected devices per North American household. This figure is alone capable of convincing any advertiser to focus on video advertising more as most of these devices/screens will cover video at its core.

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In US, advertisers are already shifting their cable TV and other primary TV budgets to digital video which will continue to shift YoY in many years to come. With decline in cable TV advertising budgets, it can directly be linked to a recent research which stated that there can be 57 million people who will cut the cord (cable TV) by the end of the year. Now this is the reason why all TV manufacturers produce connected TVs; the TV has become just another screen in the home for streaming video content. Millennials and other next gen audiences use services like Hulu and Netflix to stream content to their connected TVs.

Effective strategies and measurement of video advertising

  • Choose relevant audiences and 3rd party data for personalized as well as targeted delivery for effective video ads
  • Do Not Spam and keep right frequency capping, as most of the video ad formats are nowadays of non-skippable medium
  • Make use of effective brand safety and media quality control measurements from 3rd parties such as MOAT, IAS and Nielsen
  • Utilize on demand and premium inventory from leading publishers
  • Video landscape is scattered and prevalent on most of the screen types, so make best use of available devices
  • Explore OTT and Connected TV with non-skippable ads

For more information on the programmatic video advertising on Adobe Advertising Cloud, please contact your Account Manager today.