Advertisers shift spend to video

15 September 2014

LONDON: Spending on digital video in Europe increased 42% over the past year and over half (52%) of agencies have shifted adspend from their broadcast budgets to video, a new industry report has revealed.

The "European State of the Video Industry Report" by Adap.tv, the programmatic video platform owned by AOL, also found 48% of agencies have shifted adspend from display, 33% from print, and 10% from search, The Drum reported.

Based on the responses of 175 ad buyers and publishers, the report went on to disclose that agencies in Europe expect their digital video budgets to increase by a third next year.

Although publishers said selling directly to brands is still the most common way inventory is sold, the report predicted that the proportion of agencies buying from a private video ad marketplace will increase by 81% in the next 12 months.

"DSPs [demand side platforms] may dominate as a buying channel for European ad agencies, but private marketplaces came in a surprising second," the report said.

"One possible reason is rapid agency adoption, with 57% of respondents reporting that they are currently buying video in this type of environment," it continued. "This also explains why European agencies aren't going publisher direct with the same frequency as other programmatic channels."

Ad viewability emerged as the top concern for more than two-thirds (67%) of European agencies, while ad verification and ad fraud were cited by 57%.

Data-driven video buying was a key issue for agencies, the report found, because a full 90% said they used data to target video in their ad buying and a quarter (24%) used data-driven practices to plan and buy TV.

"They appear to enjoy a close working relationship with their brand clients to facilitate targeting as well, as 68% of them use first-party data to target," the report said.

"Because only a quarter of agencies (26%) are using second-party data to target their advertising, client data sharing is more common than is sharing user data with media partners," it added.

Data sourced from The Drum; additional content by Warc staff