The UK Online Video Advertising Market Report
The eighth report from Collective
June 2015
Contents
Executive Summary
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Simon Stone, Commercial Director of Collective reports on the growth of online
video advertising during the first half of 2015
The current online video marketplace
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Who is buying pre-roll advertising?
Average campaign budgets
VoD as part of the wider media mix
The evolving video marketplace
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Programmatic video
What is the primary measurement metric for online video?
The increasing importance of data
More than Broadcaster VoD
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Non-Broadcaster pre-roll
Other forms of online video
2015 and beyond
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Market advances required to facilitate increases in VoD spend
Projected growth
About Collective
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Overview
TV Accelerator
Contact
Executive Summary – VoD budgets increase by 50% year on year!
As we enter our 8th year in the online video advertising space, VoD continues to grow at a rapid
pace. The recent IAB/PwC UK Digital Adspend Study for 2014 showed that digital video has grown
tenfold in 5 years and by 43% since 2013 to £442m.
Results from our latest media buyers survey demonstrate this accelerated market growth. The
average VoD budget increased by 50% YoY and over a third of respondents online video budget
now exceeds £75,000. The majority of buyers will increase their VoD spend by more than 25% over
the next 6 months.
Our study mainly focuses on video advertising placements around professionally produced content
on the web. This is dominated by pre-roll ad placements, usually a 10 to 30 second audio-enabled
video advert that is played when a user clicks to view a video online. Although pre-roll video
accounts for 93% of the market, two thirds of TV buyers are now buying video across other formats
beyond pre-roll including in page, in banner and within rich media display formats.
The survey also explores attitudes to programmatic video, measurement, data and what buyers
require for them to allocate even more share of their budgets to VoD across 2015. Brand safety and
viewability emerged as key factors in facilitating the growth of online video.
For the sake of clarity, this report refers to VoD throughout - Video-on-Demand. It is important to
highlight that most media buying agencies refer to online video advertising around content as VoD.
The VoD media buyers’ survey intends to provide advertisers, publishers, content owners and
media buying agencies with valuable insight. Analysis of the results from our latest survey,
completed by over 100 VoD buyers across the top 30 London media agencies, offers a strong
indication of the current status of the UK online video ad market.
Simon Stone
Commercial Director, Collective
The current online video marketplace
Who is buying pre-roll advertising?
VoD responsibilities continue to sit mainly with digital buyers. The figure for media buyers saying
that they are responsible for VoD and Digital has stayed the same at 56% compared to 38% who say
they buy VoD and TV.
However, this does not mean that digital budgets are fuelling the growth of VoD. Regardless of
whether a digital buyer is booking the campaign, TV budgets are still being allocated to online video
mainly to deliver incremental reach vs TV. TV and digital teams are starting to work more closely
together as a greater share of money moves into video beyond Broadcaster VoD.
Average campaign budgets
We estimate that the average campaign budget for VoD is now £76,000, up £20,000 from our last
survey. This figure has been derived by taking an average from over a 100 buyers who responded to
this survey.
This 36% increase is encouraging as it represents continued growth in the sector and marks the first
time that average spends have exceeded £75,000. However, when we consider this number
alongside the overall investment into TV there is clearly still scope for the market to grow even
further over the course of 2015 and beyond
VoD as part of the wider media mix
The importance of VoD continues to be highlighted in our survey. 62% of respondents said that it
featured on more than half of their media plans whereas last year the majority said that less than
half of their media plans included VoD. 42% stated that VoD features on 75% or more of their
campaigns.
The evolving video marketplace
Programmatic video
For the second year in a row our survey explored the subject of programmatic buying for video,
where price is determined by supply and demand and activity planned through automated
interfaces.
The number of buyers allocating more than half of their budget to programmatic video has grown
by 13%. However, this still represents less than a third of respondents with 40% saying they rarely
use programmatic buying tools when implementing VoD activity.
This demonstrates that programmatic video buying is still in its early stages with many agencies still
in a test phase to establish the best way to make it work on a larger scale.
What is the primary measurement metric for online video
The majority of respondents (35%) stated that their primary means of measuring a successful VoD
campaign is view-through rates. The next most important factor is delivering incremental reach
over and above TV. Other factors such as reach and brand uplift metrics are also being considered.
This clearly shows that view-through rates are now being considered a primary factor when
determining an engaged viewer and the CPCV (cost per completed view) buy metric is becoming
more readily adopted. The good news is that yet again the importance placed on CTR has declined
since the last survey was carried out as more brand metrics come into play.
The increasing importance of data
62% said that audience demographic and behavioural data is the most valuable when trying to
reach a target user. This has grown by 14% YoY as more audience targeting tools become readily
available. The next most important factor is using TV audience data to align pre-roll video with TV,
which has been demonstrated by the rapid uptake of our TV Accelerator targeting technology.
21% placed emphasis on context and site specific targeting, which shows that although not the
main priority, there is still a desire to ensure that brands are associated with the right kind of
content. As one respondent said “Environment is key and the ability to deliver premium content
and brand safety remains paramount.”
More than Broadcaster VoD
Non-Broadcaster pre-roll
Media buyers continue to see the value of video content available outside of long-form broadcast
channels, with 63% of buyers placing less than half of their VoD campaigns on broadcaster
channels.
While broadcaster platforms will always remain strong in terms of share of spend and quality
content, the results seen here highlight a trend of using short-form video content to help drive
reach alongside TV, with brands and agencies alike recognising the role that short-form content is
able to play in the wider mix. As more money moves into non-broadcaster VoD it’s important for
publishers to invest in premium short form programming as well as premium video players.
Other forms of online video
We asked a new question to find out if both TV and digital buyers are buying video in other formats
beyond standard pre-roll. The most popular format for delivering video aside from pre-roll was
within a rich media unit.
A really interesting statistic to come out of the study was that 65% of TV buyers are now buying
video in page, in banner and within rich media display formats. A reason for this change in the
market is due to broadcast teams looking for other ways to deliver their TV budgets online due to
limited supply of pre-roll inventory. As the video market quickly grows, publishers are placing video
within ad units aside from pre-roll to meet the demand.
2015 and beyond
Market advances required to facilitate increases in VoD spend
The question of what is required to drive increased VoD spends highlighted some interesting facts.
The majority of participants (63%) again referred to the importance of aligning TV and digital. 37%
said proof VoD delivers incremental reach vs TV was key, whereas 26% said that the ability to
bridge the gap between TV and digital was vital to enable multi-screen campaign reach and
frequency.
Although online video sits in different departments within each media buying agency (broadcast,
digital or screen teams) the budget still predominantly comes from TV budgets. Media buyers are
therefore placing more emphasis on aligning their TV and online video campaigns. Tools that utilise
TV data points to inform digital planning will be key to driving increased levels of VoD spend.
Our TV Accelerator (TVA) targeting technology, that combines BARB and online data, was initially
launched to offer incremental reach for online video vs TV. TVA is now being used by agencies in
numerous other ways including delivering additional campaign frequency, providing sequential
messaging across multiple formats & screens and targeting TV viewers online of particular TV
channels and programmes.
Other factors highlighted in helping to grow VoD spend were viewability and brand safety.
Viewability is becoming increasingly important as more agencies and media owners implement
tracking to avoid bot traffic and ensure the ad placement is seen.
Projected growth
The VoD market shows no signs of slowing down. 59% of respondents expect their VoD spend to
grow by 25% or more over the next six months and not a single respondent expects their spend to
decrease.
Online video is now becoming a larger part of the overall digital strategy as the importance of brand
advertising continues to move up the agenda. To grow spend the market needs to improve
advertisers confidence in VoD by offering quality content (professional, brand safe), premium
inventory (above the fold, click to play, viewable) and actionable measurement to show ROI
(engagement, brand metrics).
Digital video will exceed half a billion in 2015. As TV money continues to drive online video forward,
advances in technology to facilitate choreographing messages across screens will enable the VoD
market to continue it’s strong growth.
About Collective
Overview
Collective is a leading digital marketing solutions company, which helps advertisers build their
brands online by focusing on the intersection between engaging creative and innovative
technology. The company’s approach breaks down traditional media and creative silos and
provides brands with the means to choreograph messaging and control audience reach and
frequency across multiple digital screens. The company operates from nine locations globally in
North America: New York, Boston, Chicago, Dallas, Los Angeles, San Francisco and Belevue; and
internationally from Bangalore, India; and in London, UK. To learn more about Collective,
visit www.uk.collective.com.
TV Accelerator
TV Accelerator (TVA) is Collective’s ground-breaking audience targeting technology that launched in
response to advertiser demand to measure their multi-screen digital (desktop, mobile and tablet)
activity alongside their TV campaigns. Utilising Collective’s market leading data capabilities, TVA
uniquely linking BARB’s consumer viewing panel data to an Audience Cloud of more than 25 million
active online consumers to connect multi-format (video, rich media and display) digital campaigns
to TV. TVA can be used to deliver incremental reach, multi-screen frequency and sequential
messaging. It can also enable targeting the audience of a TV channel, programme, genre or
competitor.
For further information please contact:
Simon Stone
Commercial Director
Collective
020 7440 5805
sstone@collective.com