Online video is growing faster than other advertising channels and formats. YouTube is the most prominent and influential platform in the online advertising market.
YouTube Advertising Trends
As the YouTube ad platform continues to grow exponentially, it can be challenging to follow all the new developments contributing to its expansion. Here are several trends in YouTube advertising that we observed in 2015.
An Expanding Audience.
There are over 1 billion unique visits to YouTube each month, with the average user watching 16 minutes and 49 seconds [CT1] of online video ads every month. Video ad views continue to explode. In December 2013, video ads topped over 35 billion views and averaged over 100% yearly monthly growth.
Online video ad revenue is increasing.
According to a 2014 Business Insider report, video ad revenue is increasing at a growth rate (CAGR) of 19.5% over three years to 2016. While video ad revenue is expected to reach nearly $5 billion in 2016, TV ad revenue is projected to decline by almost 3% each year during the same period.
High click-through rates.
Of all the digital ad formats, video ads have the highest click-through rates (CTR), with an average of 1.84%. As video ads become more popular, that rate is expected to increase.
Better connections.
Wireless Internet networks are becoming more reliable and fast enough to stream uninterrupted video to mobile devices. According to StatCounter (a web tracking firm), nearly 30% of all web traffic comes from smartphones and tablets. As a result, video ads are becoming a more widespread alternative to deplorable mobile banner ads. Video ads do a better job of capturing a viewer’s attention than static ad formats.
Better Visibility.
One of the significant concerns online advertisers have is if their ads will be placed where Internet users will see them. About half of all online ads are currently set in obscure places where users do not see them. However, Google AdWords for video only offers online video ad space where YouTube users can see them. Not only does Google AdWords ensure that your video will be placed in a location with optimum visibility, it further empowers businesses to take control of their ad campaigns. Companies can decide the video format they want to use for YouTube advertising and specify the target audience they are trying to reach. The question of whether or not video ads are seen by online viewers who are multitasking has emerged. Nevertheless, the high demand for online video is enough to ensure that multitasking is not damaging the video ad market.
Automatic Bidding.
In today’s online market, real-time bidding for video ad space, placement, and positioning takes place in a fraction of a second. When using Google AdWords for the video to create a YouTube advertising campaign, media buyers can set a weekly budget and their max cost-per-view (CPV) bid. Instead of going in and manually entering bids, buyers can rely on automatic bidding to ensure they remain within their marketing budget. U.S. buyers will spend 29% of their digital display budgets programmatically by 2017, according to an eMarketer report.