- Spending on video ads is growing quickly. US digital video advertising revenue from PC- and mobile-based video ads will top nearly $5 billion this year, and grow at a five-year compound annual growth rate (CAGR) of 21.9%. Total revenue will reach $13.3 billion by year-end 2020 (see chart, above), according to BI Intelligence estimates based on historical data from the Interactive Advertising Bureau (IAB).
- Mobile will be the biggest driver of digital video ad spend over the next few years. Advertisers are rushing to snap up mobile video ad spots as video viewership increases on smartphones and tablets. Mobile video ad revenue will grow more than 3x faster than desktop video ads through 2020. US mobile video ad revenue will explode from $1.2 billion this year to nearly $6.5 billion in 2020, a five-year CAGR of 39.5%.
- Video is quickly replacing static display advertising on desktop. Desktop video ad revenue will top $3.7 billion this year and grow at a five-year CAGR of 12.9%, reaching $6.8 billion in 2020. Video will account for 41% of total desktop display-related spending in 2020, up from a 26% share this year.
- Advertisers are planning increases in digital video-ad spend allocation. Three-fifths of advertising agencies expect to see increased spending on digital video ads this year, according to a recent BrightRoll survey.
- Video ads perform better than standard display ad units. In-stream video ads, including ads that play at the start (pre-roll), during (mid-roll), and after (post-roll) video content, yielded click-through rates (CTRs) that were 18x higher than HTML5 banner ad units in February 2015, according to Google's Rich Media Gallery.
- Video's premium status within digital is reflected in the format's high prices. On digital publisher Vice, direct-sold pre-roll video ads fetch a cost per 1,000 impression (CPM) of $45, compared to a CPM of $12 to $14 for display ads. On Instagram, video ads have average CPMs of $30, compared to $20 for Instagram photo ads, according to AdAge
- Facebook, Instagram, and Twitter have all introduced new digital video ad products. Social video offers several major advantages from an advertiser perspective, including huge built-in [...]