Tipping point: Broadcast ad budgets are finally shifting to digital video

Broadcast ad dollars are finally starting to stream into digital video budgets, resulting in what Rob Reifenheiser, Essence Digital’s North American head of media in North America, is calling a “video neutral” approach.

In a study sponsored by AOL Platforms, 40 percent of media buyers say they will move funding for traditional TV buys to digital video.

“I’m surprised that number isn’t 90 percent,” said Reifenheiser. “There are so many indicators that lead you to have much richer digital video in your mix. There’s much less clutter; television has many more commercials where pre-roll is much more limited. And if you go programmatic with your video, then you’d have a huge efficiency boost because you’re eliminating waste. It really begs the question: Are people really looking at it closely when they don’t intend to make a shift like that at all?”

Still, this is up about 76 percent since last year. Cable has seen a similar shift, with 35 percent of media buyers planning to move part of that budget to digital video (up 40 percent since last year).

TV and video budgets are starting to come from the same bucket. “I would call it a video-neutral approach. You have one line item, which is your video, and from there you triangulate what the right mix is, especially when you look at reach potential.”

This may signal a surge in confidence in digital over its traditional counterpart as seen in the graphic below:


There’s also a more general digital shift in marketers’ approach to broadcast. Currently, 43 percent of brands use automated or data-driven processes to drive traditional TV buys (24 percent of agencies and 19 percent of ad networks are doing the same).

But that number jumps to 60 percent when brands are asked if their TV buys will go programmatic in the next two years.

“Until addressable TV figures out ad serving from a platform, it’s going to be hard for it to be sold in a programmatic way at scale,” said Reifenheiser. “But that’s absolutely the future, because programmatic has taken the world by storm. Television’s certainly not dying, so if you can make it more targeted and much smarter through data, everyone’s going to want that.”

There are even more changes on the horizon for digital video. Check out the full report to see how:

  • Video ad growth is impossible to ignore.
  • Programmatic is overtaking publisher-direct buys.
  • Viewability vexes both buyers and publishers.

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