CHICAGO: Agencies are increasingly confident in the return on investment to be gained from online video and are devoting more focus to this area, new research has shown.

A third quarter survey of advertising agencies conducted by STRATA, a supplier of media buying and selling software, found that 71% reported more interest in that medium compared to a year ago, the largest increase in the history of the survey.

Almost half (45%) said they were confident they were getting good value in recent online video ad purchases, up 51% on the same time last year. At the same time the proportion of agencies still unsure of online video advertising value had dropped by around a quarter over the year to 36%.

A major contributing factor to this surge in conviction is better targeting: 55% said their online video ads reached their intended targets most of the time, up 38% from a year ago.

At the same time, agencies have been exploring new ways to increase the reach of video ad buys through video aggregators and ad networks. Just over half (52%) reported that accessing these was now 'important' or 'very important' to them, a jump of over 54% from the second quarter.

On a similar point, three quarters (76%) of agencies said it was 'important' or 'very important' to extend their buys into premium online video from cable/broadcast networks, a 32% increase from a year ago.

"As confidence in online video ROI grows, agency appetite and acceptance of different forms of digital video will only rise," said J.D. Miller, director at STRATA.

"We are seeing agencies increasing their focus on automation tools including programmatic, to find the right inventory, the right audience at the right time."

On the last point, the survey found 40% of agencies were making at least 20% of their buys programmatically.

This was across a range of ad types, including mobile (29% of agencies), streaming video (22%), and streaming audio (24%).

But many agencies still have worries over the quality of inventory (60%) and the transparency of inventory sources (45%).

Just under $2.0bn was spent on online video advertising in the US during the first six months of 2015, a 35% rise from the previous year, according to the latest data from the Internet Advertising Bureau. This amounted to approximately 7% of all online advertising expenditure in H1 2015.

Data sourced from STRATA; additional content by Warc staff