According to Alphabet, YouTube’s parent company, the video giant’s ad revenue dropped by about 2% in Q3 2022. 

YouTube wasn’t the only giant facing an unusual dip—Facebook’s ad revenue dropped, too, as advertisers reigned in their budgets amid the economic uncertainty. 

But don’t feel too bad for YouTube—the platform still attracted almost $30b in ad revenue last year, and according to our data, that number will continue going up.

In Q1 2023, nearly 9.8k advertisers in industries such as Media & Entertainment, Technology, Medical & Pharmaceutical, Finance, and Food, spent $5.7b on YouTube, representing a 28% YoY increase from Q1 2022. Advertisers in those categories accounted for $3.5b or 62% of the ad investment in YouTube in Q1.

Let’s take a closer look at how some of those advertisers helped bring YouTube’s ad business back to life. 

A Media & Entertainment Playground

More than 60% of global consumers watch videos on YouTube, and almost all do so for entertainment. 

Case in point: In 2020, people consumed more than 6b hours of content on YouTube Gaming, up from 3.15b in 2019. (It’s worth noting the pandemic likely contributed to the 90.5% increase and subsequent change in people’s watching habits.)

 this was fueled by the COVID-19 pandemic

Unsurprisingly, this makes YouTube a playground for Media & Entertainment advertisers. 

According to our data, advertisers promoting movies, drama TV shows, subscription TV services, and game titles all increased their investment in YouTube by more than 60% YoY. Overall, Media & Entertainment advertisers increased YouTube spending by 88% YoY in the first quarter.

A level deeper, advertisers promoting movies, who accounted for 20% of the spending from this category’s advertisers, invested more than $328mm in YouTube. 

For The Walt Disney Company’s advertisers, some of those dollars went to ads leading up to the release of Ant-Man and the Wasp: Quantumania in theaters in February, and the ongoing promotion for its forthcoming release on Disney+ (May 17, 2023). 

Meanwhile, advertisers promoting drama TV shows, including HBO’s The Last of Us, spent almost $236mm. 

Emily Giannusa, HBO’s VP of program marketing, said, “This was a massive-scale campaign [to promote The Last of Us]. Even though I can’t talk about budget here, we ignited all over the world.”

Giannusa and Co. used “breadcrumb” content to appeal to the series’ fans, including YouTube ads, a teaser that generated more than 57mm organic views in 72 hours, and ads on HBO Max. 

Streaming service advertisers fight for supremacy 

Advertisers for big names such as Apple, Paramount, and The Walt Disney Company, collectively increased their investment in YouTube by 168% YoY to $178mm. (Apple, Paramount, and The Walt Disney Company accounted for 70% of the investment in Q1.)

For these advertisers, the triple-digital increase comes amid the ongoing battle for streaming supremacy as new entrants gain footing and Netflix loses market share. 

Advertisers for HBO Max, Apple, Paramount, and The Walt Disney Company will likely see this as an opportunity to woo consumers, especially as some services raise their prices and push even the loyalist consumers away. 

That said, spending from streaming advertisers could change course quickly if the recession puts too much pressure on people’s budgets. According to data from early 2023, just over 15% of Americans say they don’t use any TV subscription services, up by almost 3% compared to October 2022. 

Pharma Advertisers Embrace YouTube 

Pharma advertisers have historically gravitated to traditional ad formats, so much so that those promoting over-the-counter (OTC) meds and medical devices spent more than $7.9b on TV ads in 2022. 

That spending continued into 2023, with advertisers investing heavily in lengthy TV ads. In fact, pharma and medical advertisers invested over half their TV budget on ads between 46-60 seconds in Q1, up from 44% in Q1 2022. 

For example, advertisers for AbbVie spent 86% of their budget on 46- to 60-second ads, with the remaining 14% going to commercials of less than 45 seconds. 

But as younger generations enter the healthcare world and turn to social media for health-related advice, including YouTube, pharma and medical advertisers are changing their tune. 

In Q1, medical and pharma advertisers increased their investment in YouTube by 26% YoY, despite the number of companies investing in them dropping by 29%.

If that doesn’t go enough against their historical grain, this will: Many medical and pharma advertisers are embracing the short-form content people love. 

In Q1, almost 40% of the companies in our sample (130 out of 325) bought ads that cut at the 15-second mark, including those promoting hemorrhoids OTC meds, diabetes prescriptions, and dietary supplements. 

Meanwhile, more than 40% and 20% of companies spent on ads of 16-30 and 31-45 seconds, respectively.

Not All Advertisers Are Bullish 

YouTube is back where it belongs—in the good graces of advertisers—but not everyone was ready to dive back in. 

Finance advertisers, for example, decreased their investment in YouTube by 29% YoY to more than $382mm, undoubtedly a reduction driven by the collapse of Silicon Valley Bank (SVB), rising inflation, and the uncertain economy.

At the same time, technology advertisers reduced spending on YouTube by 14% YoY to $647mm, thanks to sizable reductions by cell providers (down 46%), web design & development (down 54%), and financial software (down 47%).

Despite decreases from these advertisers, YouTube will remain a mainstay—it’s too big and reaches too many people to ignore. 

Plus, as the platform rolls out commerce-centric features, advertisers in other industries, including retail, will see the world’s biggest video platform in an even brighter light. 

For more insights, sign up for MediaRadar’s blog here.

So much so that the average person spent over 5 hours a day watching videos in 2021 (across TV and digital).

Video ad spending is through the roof, but where are budgets going, and what does the allocation mean for the future?

Advertising Like It’s 1950

Many historians dub the 1950s the Golden Age of TV. One could argue that TV ads shined the brightest around that time, too, as “motion pictures” captured the attention of consumers and advertisers alike. 

It’s 2023, and TV is still popular, with Americans watching more than 2 hours of it a day. But the emergence of YouTube, connected TV (CTVs), and social media have turned the spotlight. 

Certainly, ad dollars have followed, right? 

Yes, but less than you’d think.  

In 2022, advertisers for more than 12.5K brands spent more than $59b on TV ads, representing a 3% YoY increase from 2021; the number of brands buying TV ads also increased by 3% YoY. 

Eight thousand of those brands increased TV spending by more than 20%, while advertisers for more than 30 brands surpassed the $100mm mark, including 4imprint Inc. ($175mm), BetterHelp ($349mm), FanDuel ($994mm), and St. Jude Children’s Research Hospital ($213mm).

For FanDuel and other gambling advertisers, the spending follows a historical MO centered around flashy, often costly, campaigns aimed at customer acquisition. But those strategies are souring. 

David VanEgmond, a former FanDuel and Barstool Sportsbook executive, said, “You’ve seen the industry pull back and say, ‘Wow, fighting for market share got pretty ugly in terms of losses.” 

He was talking about the lengths gambling advertisers went to catch the attention of the 1 in 5 people who bet on sports. Although those lengths were powerful, they often lacked measurement and attribution. 

As gambling advertisers shift their focus to efficiency and profitability, expect the advertisers from FanDuel, DraftKings, and BetMGM to move their dollars to digital video where they can measure performance and optimize in the best interest of their bottom line. 

While no one’s surprised by the TV-heavy strategy among gambling advertisers, the investment from direct-to-consumer (DTC) brands may turn heads. 

Digital-native DTC brands embrace traditional video ads

When most people think of DTC brands, they think of digital-native ones that built their business online. Brands like Allbirds, Harry’s, and Stitchfix are all examples of DTC brands that live and breathe the internet and, thus, digital advertising. 

Despite DTC’s digital association, many brands still embrace traditional ads. 

In 2022, more than 475 DTC brands spent over $5b on TV, representing a 5% YoY increase (the number of DTC brands investing in TV ads decreased by 9% YoY).

They’re not just dipping their toes into TV to diversify their media mix, either. Nearly 270 DTC brands increased TV spending by over 20% in 2022. 

As surprising as DTC brands’ investment in TV may seem, it follows the recent trend of brands embracing traditional ads to escape the digital clutter, take advantage of consumers’ trust in these formats and prepare for the final downfall of third-party cookies in 2024.

Still, DTC brands aren’t abandoning the digital highway that got them to the top.

Of those 270 DTC brands that increased spending by at least 20%, 93% spread their dollars across multiple formats, including Airbnb ($96mm), Booking.com ($77mm), Chime (bank brand) ($63mm), and Instacart ($118mm). 

Advertising Like It’s 2023

In 2021, digital video ad spending surpassed $55b and is expected to reach $80b this year, which would represent an increase of more than 140% from 2019. 

Video advertising is table stakes, but how are advertisers spending on formats across OTT, online video, and social media? 

OTT intimidation 

OTT advertising made up just 3% of ad budgets in 2020 despite accounting for 29% of the time people spent watching their favorite shows and movies. 

A couple of years later, OTT gained mainstream status. As of 2022, the average household had nearly 7 OTT streaming services. 

However, despite the preference for OTT, advertisers don’t seem ready to dive into OTT ads.

In 2022, advertisers for more than 7.3k brands, especially those in insurance, quick service restaurants (QSRs), and cell phones, invested $1.7b on OTT ads, with nearly 4.5k (61%) advertising in multiple formats. (Remember: Advertisers spent almost $60b on TV.) 

While advertisers appear uneasy about OTT, which could be due to the down economy and the need to invest in more measurable formats, ad dollars will come as younger generations abandon traditional TV, streaming services—now including Netflix—improve their ad tech, and advertisers flock to ecosystems that can help them thrive without third-party cookies. 

Online Video (OLV) 

If advertisers are keeping OTT at arm’s length, they’re making up for it with a firm grip on online video (OLV). 

In 2022, advertisers for almost 53k brands (up by 7% YoY) spent over $28b on OLV, with over 75% (~41k brands) increasing their budgets by at least 20%. 

A select group, including Aviron Interactive ($324mm), Harbor Freight Tools ($109mm), Ka’Chava ($175mm), and Purdue University Global ($111mm), each spent more than $100mm. 

For big and small advertisers alike, OLV is a safe bet, providing them with an engaging and measurable way to reach a massive addressable audience across popular platforms like YouTube. 

While these video hotspots have long served as a haven for advertisers, their popularity often ignites rising ad loads—and prices. If these hotspots become too crowded and expensive, forward-thinking advertisers may exit right to more affordable (but less proven) ones, like OTT and CTV.   

Social Media

Last year, advertisers for 37k brands spent $6.7b on video ads across social media, but are they falling out of favor? 

Maybe. 

Only a fraction of brands (~5k) increased their spending on video ads by more than 20%—and those were brands with deep pockets, like AMC+, Masterclass, and Spotify. Nevertheless, spending from these brands reached nearly $5b, or 72% of overall spending on social media video ads. 

The apparent aversion to social video—at least compared to video ads elsewhere—is likely due to the rising ad loads and negative sentiment. Social media ads are also losing some of their steam in the wake of Apple’s App Tracking Transparency, which allows iPhone users to ask apps not to track them across other websites and apps. 

According to analysis, Apple’s firm stance on privacy was expected to cost Facebook more than $12b in 2022 due largely to its ads’ diminishing impact. Other social platforms are feeling the brunt as well.   

What We Learned at NewFronts 2022

The battle for video advertising supremacy (and dollars) is full steam ahead, and it’s far from reaching its main event. The degree of diversification between digital and traditional formats that still exists makes that abundantly clear.   

But there’s a battle within the battle that’s arguably more captivating. We’re talking about the battle for digital video advertising supremacy, which took center stage at IAB’s NewFronts.

Here are some takeaways:

• Peacock introduced two new ad formats, including “scene ads,” which allow brands to insert themselves “directly into targeted content moments through natural visual effects.” Amazon released a similar format.
  
• In Twitter’s first NewFront since Elon Musk’s acquisition, the platform pushed Amplify (released in 2019) as a way for brands to run ads alongside audio and video content.
  
• Snap teamed up with Cameo and introduced Snap Promote, a solution aimed at content partners on Discover.
  
• Meta focused on its metaverse and highlighted how brands could connect with consumers on Reels. 

Whichever battle you watch, the fighting is over the same thing: Video ad dollars—and both digital and traditional players will stop at nothing to get them. 

For more insights, sign up for MediaRadar’s blog here.

In fact, a study found that people are 27x more likely to click on video ads than banners. 

In the first half of 2022, 37.8k companies promoted nearly 57k brands via video ads on social media, YouTube and OTT. 

More than half of this spending came from advertisers in Media & Entertainment, Retail, Services, Finance & Real Estate and Technology. Collectively, advertisers in these industries spent nearly $9mm.

The scale and adoption of video ads isn’t the headline story, though. 

A level deeper, some interesting storylines develop. Here are the three video advertising trends you need to know.

Advertisers Are Kickin’ it Old School

The video world is in a state of constant change to meet the shifting consumption habits of society. 

In tandem with video’s growth has been an equally rapid evolution of video advertising. CTV and OTT are perfect examples of this.

Despite the options, many advertisers are still kicking it old school. 

Case and point: 68% of advertisers in H1 2022 bought only video ads on social media or YouTube. 

No one will second guess spending on social or YouTube because the average person spends 147 minutes per day on social media and more than 29 minutes per visit on YouTube. A hefty dose of video ads are a necessity.

It always will. 

While social media platforms and YouTube will remain locked in a tight race at the top, social media could gain an edge, thanks to platforms like TikTok taking hold with younger generations and the more authentic forms of marketing it can provide.

In fact, TikTok is on track to overtake Facebook in terms of influencer marketing spending this year and will surpass YouTube by 2024. 

Meanwhile, YouTube is carving out a niche in the online gaming world.

Regardless of their paths, YouTube and social media will always command significant video ad dollars. 

That said, a line may be forming that’ll impact where advertisers decide to spend. 

For example, social media may attract more dollars from video advertisers who want to spend on influencer marketing.

Only time will tell.   

OTT Ads Still Aren’t a Mainstay

If traffic and popularity were the benchmarks that advertisers used to decide how to allocate their ad dollars, OTT would be in the mix.

As of February 2022, there were more than 240mm OTT users in the US. 

By 2026, that number’s expected to surpass 250mm. If that projection holds, 73% of the US will consume content via OTT platforms like Discovery+, Paramount+ and Hulu. 

OTT is how the overwhelming majority of people consume content—now and in the future—which is why it’s surprising that only 16% (9.2k) of video advertisers invested only in OTT ads. 

Reminder: 35% and 33% of advertisers only bought video ads on social and YouTube, respectively.

If we add in the advertisers who weren’t ready to call themselves exclusive with OTT, i.e., they bought OTT and social and/or YouTube, that number jumps to 26%. 

Still, for something so popular, why are such a relatively small group of advertisers giving OTT their undivided attention? 

The (likely) answer: maturity. 

Despite its popularity among consumers, OTT advertising is still relatively new. 

So, while social and YouTube attract advertisers because they’ve been around the block, advertisers are staying away from OTT because it doesn’t even have its training wheels. 

The types of companies investing big dollars in OTT support this way of thinking.  

Two companies that leaned in heavily to OTT were Unilever (Dove Body Love Shower Collection, Klondike Bars and Vaseline Cocoa Radiant Collection) and Proctor & Gamble (Downy Liquid Fabric Conditioner, Gain Laundry Pacs and Tide).

The willingness of advertisers from these companies could indicate that OTT is still too “risky” for those with smaller budgets or less wiggle room for experimentation.

Until OTT advertising can prove its worth over and over again, some advertisers will steer clear—those from Nintendo, The Home Depot and Walmart already are (although that’s likely more to do with preference than risk appetite). 

While this strategy makes sense, it means that many advertisers are bypassing inventory and opportunities to reach consumers with some of the most engaging ad types out there. Given fewer advertisers are investing here, this can also be an opportunity to stand out in an environment with potentially lower ad loads.

No Mixing and Matching

Spend any amount of time Googling “marketing buzzwords,” and you’re bound to come across some version of “cross-channel” or “omnichannel” marketing.

These terms rose to fame—and pain—as consumers quickly adopted technology and incorporated it into their lives. 

Today, the average household has access to 22 connected devices, meaning that the path to purchase for the average Joe and Jane is the furthest thing from linear.

Advertisers account for this by launching cross-channel campaigns that dot the Internet with ads, ensuring they stay in front of their target audience whenever and wherever they are online.

For whatever reason, many advertisers are ignoring this inherent behavior when it comes to their video ads—at least through the first half of the year.

Instead, many advertisers are throwing their dollars at one or two channels; only 3% of advertisers invested in social, YouTube and OTT, including The Walt Disney Company, Comcast, Amazon, Paramount and Mars.

These top-spending categories combined to spend nearly $2.5b in H1 and included big names like Burger King, GEICO and Verizon, which all spent more than $100mm on a three-pronged video approach. 

All in all, 86% of advertisers during H1 kept their video ad dollars in one ecosystem. 

It’s hard to say why advertisers are so steadfastly against mixing and matching their video strategy, but the makeup of the advertisers investing in these ecosystems could start to paint a picture. 

YouTube is the preferred video advertising destination for 44% of Technology and 37% of Media & Entertainment advertisers, including those from Lingokids (Media & Entertainment) and Wix eCommerce (Technology). 

On the flip side, more than half of Finance & Real Estate (52%) and Retail (53%) advertisers went with a social-only video strategy, including Albertsons and Found (a small business banking app). 

Is that enough to paint a definitive picture as to why advertisers are picking social over YouTube or vice versa?

No, so the decision likely has to do with historical data and comfort zone. 

Given today’s uncertain macroeconomic climate, many advertisers will stick to what’s worked in the past. For the next several quarters, efficiency and smart spending will be key for advertisers of any size.

That said, the siloed video ad strategies do present an opportunity for advertisers willing to mix and match; advertisers that can do so effectively will stand out and differentiate themselves from the competition.  

Hey Advertisers—There’s More Inventory Out There

There’s no denying that advertisers of all stripes love video. 

There’s also no denying that many of them aren’t spreading the love across all the inventory available. 

That’s the opportunity. 

For advertisers looking to maximize their budgets, scaling their dollars across applicable video channels will be a must. 

The online world is far too complex and crowded for siloed video ad strategies to perform long term. 

For more insights, sign up for MediaRadar’s blog here.

“Self-Portrait without Beard” by Vincent Van Gogh? 

How about the most expensive Rolex ever sold at auction? (You could buy 5 of them if more than one existed.) 

Why not $100mm worth of YouTube ads? 

That’s precisely what 14 companies did in 2021 when they combined to spend nearly $2.7b on YouTube ads (27% of YouTube ad buys in 2021). 

Which ones? 

You can probably guess a few of them. 

Let’s take a look.

Amazon 

Amazon’s a big fan of video advertising. 

In 2021, the one-time book store turned we’ll-sell-you-anything-on-the-planet store, spent 43% of its ad dollars on videos, of which 99% went to YouTube.

In 2021, Amazon increased its YouTube ad investment by 124% YoY, spending more than $1mm on ads across 23 content categories, including Music, Gaming, Society & Culture, and Kids & Movies. 

• Music channels: 52% of ad buys
• Gaming channels: 9% of ad buys
• Society & Culture channels: 7% of ad buys  
• Kids & Movies channels: 6% of ad buys
• Remaining channels: 3% of ad buys

Amazon spent 47% of its ad dollars to promote Retail products and services, including Amazon.com, Prime, Amazon Pharmacy, Audible and Woot. 

Its Retail category ad spend was up 86% in 2021.

Outside of Retail, Amazon spent 30% of its dollars on Media & Entertainment services, including Amazon Prime Video—an increase that undoubtedly comes from its battle for OTT supremacy. 

The last sizable chunk of spend went to Tech products like Alexa, Halo, Fire TV and Ring. 

Specifically, Amazon increased spending on Alexa and Halo by 78% and 171%, respectively. 

It’s worth noting that Amazon spent 29% less on Fire TV, which flies in the face of its increased promotion of Prime Video and comes at an odd time given the launch of an all-new line of Fire TV devices in Q3. 

Apple

Last year, Apple increased its ad spend on YouTube by 43%—all of which goes to the video giant. 

Although Apple allocated more than $1mm to 15 content channels, the majority of that—67% of the company’s YouTube ads—went to Music channels.  

Outside of Music channels, Apple spent 6% of its ad dollars on Sports channels, while the remaining ads went to channels that each received 4% or less of its spending. 

What did Apple promote on these channels?  

Apple divided it between Media & Entertainment (Apple TV+ shows), Technology (phones, tablets, computers and accessories) and Retail (4% of overall spend), which includes Apple Books and the Apple App Store.

Unsurprisingly, Apple spent heavily on Consumer Electronics, the top category under Tech in 2020 and 2021, representing 96% and 98% of this category’s spend.

Within the Consumer Electronics category, Apple increased spending YoY on everything except Smart Watches, which it spent 41% less on in 2021 than it did the year before. 

File this one under the “we’re not surprised” section: Mobile Phone was the top category, coming in at 27% of Tech spend in 2021; the investment was just shy of 195x of the ad buys in 2020. 

To the same tune, Laptop Computer and Tablet Computer ad buys were up YoY by 363% and 150%, respectively. 

Capital One

Capital One increased its investment in YouTube ads by nearly 315% YoY in 2021, which accounted for 99% of all its video spending and 30% of all digital spending. 

The large increase is likely an indication that the company is shifting its ad strategy. 

Unlike other major players who spent big on dozens of content categories, Capital One focused on fewer: 

• Music channels: 46% of ad buys
• Tech channels: 18% of ad buys
• Food channels: 8% of ad buys
• Remaining channels: 5% or less of ad buys

Q2 and Q3 saw 15 to 18x times the ad buys than the previous year during the same period, which makes sense given the time of year and all the big consumer pushes that Capital One wants to take part in. 

Capital One continued to spend leading up to the holidays. In Q4, spending increased by nearly 175% from the previous year.

So far in 2022, Capital One has spent 200% and 10% more YoY in January and February, respectively. 

Expedia

Ad investment on YouTube for Expedia’s brands, including Trivago, HotWire, Hotels.com, Expedia and Vrbo, increased by almost 200% YoY as it invested over $1mm on 22 content categories. 

• Music channels: 32% of ad buys 
• Kids channels: 13% of ad buys 
• Society & Culture channels: 8% of ad buys
• Sports channels: 7% of ad buys
• Remaining channels: 6% or less of ad buys 

When we look at Expedia’s spending on a brand-by-brand level, we get an interesting story. 

On the one hand, Vrbo, Hotels.com and Hotwire all got substantial increases. 

Vrbo, for example, saw a 300% YoY increase while Hotels.com and Hotwire saw 26x and 83x more ad buys than they did last year. 

On the other hand, spending on Expedia and Trivago went down—Expedia spending went down by 40% YoY. 

While we expected the increases to Vrbo, Hotels.com and Hotwire as the pandemic-induced hiatus (hopefully) ended, it’s a wonder why the company didn’t do the same for its other brands. 

Gilead Sciences

Gilead Sciences, which researches and develops antiviral drugs used to treat HIV/AIDS, hepatitis B, hepatitis C and influenza, increased its YouTube ad investment by nearly 325% YoY in 2021. 

That’s an increase worth noting under normal circumstances, but the story becomes even more intriguing when you consider that this represents 91% of the company’s total digital spend. 

Said another way, Gilead Sciences essentially increased its total digital advertising budget by more than 300%, indicating a substantial shift in its strategy.

Gilead purchased at least $1mm in ads across 15 content categories: 

• Music channels: 34% of ad buys
• Society & Culture: 17% of ad buys
• Gaming channels: 9% of ad buys
• Movies & Comedy channels: 8% of ad buys
• Remaining channels: 7% or less of ad buys

The company really began ramping up spend toward the end of the year. 

In August, Gilead’s started investing at least 93% of its video ad buys to YouTube (compared to January 2021 when only 54% of its video investment was going to YouTube).

Gilead’s Q4 was the largest quarter and experienced almost 750% growth YoY, which is why we’re not surprised to see spending continue in 2022. 

So far in 2022, ad spending is up 48% and 112% YoY in January and February, respectively. 

The Over $100mm YouTube Ads Club

YouTube’s no stranger to having advertisers open their wallets in a big way.

Given the platform’s maturity, addressable audience and proven ad capabilities, the $100mm+ investments from companies like Amazon, Apple, Capital One, Expedia and Gilead Sciences will continue. 

But that’s not to say other advertisers aren’t welcome. 

In 2021, 18.3k companies promoted over 32k brands on YouTube, helping drive a 56% YoY growth in ad investment and bring total spending to close to $10b.

It’s clear that, while the “Over $100mm YouTube Advertising Club” puts you in impressive company, it’s not a card you must hold to get in the door. 

For more insights like these, sign up for our blog.

According to MediaRadar data, brands spent 11% more on programmatic between April and July than the same time period in 2019. 

However, the percent of programmatic advertisers who utilize ad tech to purchase premium ad units—native, podcast and video—has stayed steady.

What are the latest trends in buying premium programmatic ads and who are the top buyers?

We encourage you to subscribe to our blog for the latest data surrounding the advertising industry. We will provide daily updates as COVID-19 continues to make its mark on the US economy.

Native, podcast and video programmatic ads drive engagement

Overall, programmatic advertising is faring well this year. 

“For such a unique year, this year is following last year’s patterns pretty closely, albeit at a lower level,” said Andy Ellenthal, Staq’s CEO. “We expect to see a dip around Labor Day, the way we always do, but then we also expect it to come back.”

Of all the types of programmatic advertising, native, podcast, and video are premium purchases for advertisers. 

Native mobile ads are advancing

One of the latest advancements to native programmatic advertising is Nativo’s latest release of Mobile Ads SDK. The SDK version 5 features:

• IAB Open Measurement (OM) SDK Support 
• React Native Support 
• Brand Safety Support 
• CCPA & GDPR Compliance

According to publishers, they’re seeing about a 14% increase in CPM with this new version.

“As a mobile-first company, we realized that native ad formats are what drive increased engagement and retention among our app users,” said Co-Founder of Glow, Inc. Kevin Ho.

Programmatic podcast ads are positioned for growth

Native podcast ads are effective because they are tailored to a highly engaged audience and are intertwined with the flow of the show, often read by the show host. 

Now, podcast advertising is leveling up with programmatic formatting. Programmatic podcast ads make ads personalized for specific audiences—based on location, weather, and demographics. There are a few specialized companies leading the charge in developing programmatic advertising for podcasts, namely Audry.

“Native advertising in podcasts used to outperform all other ad types on most performance metrics because targeting was very limited, and brands used aggressive radio style ads,” explained Niklas Hildebrand, the co-founder of Audry. “With programmatic podcast advertising, this is no longer the case. The new generation of podcast ads are not only more targeted, but the assets themselves can be dynamically assembled for every listener and designed to fit the medium’s auditory style.”

This type of advertising is still in its infancy, but is already demonstrating many advantages. These benefits include scalability, better attribution data and improved relevance to audiences.

Programmatic video

A Hubspot report in 2017 that surveyed over 3,000 consumers found that video is the best type of content to attract people’s time and attention—and 54% of respondents said they wanted to see more video from brands they support.

People love video. That’s not changing any time soon, making programmatic video advertisements highly impactful. Advertisers can optimize their ad campaigns by making ads in the format that audiences want to see, plus reaping the benefits of targeted personalization, automation and scalability. 

Advertisers can choose from several different types of programmatic video ad types, including:

• In-stream videos
• Pre-roll videos
• Mid-roll videos
• Post-roll videos 
• Out-stream videos
• In-display videos

MediaRadar Insights

While the percent of digital advertisers utilizing programmatic tech is increasing, the percent of programmatic advertisers who utilize ad tech to purchase these types of premium ad units is not budging. 

In Q2 2020, 10% of all programmatic advertisers were buying the above three formats programmatically, only down from 11% in Q2 2019.

The top buyer of premium programmatic ad formats is the media industry. In fact, they make up 31% of all dollars spent on premium programmatic placements. When looking at programmatic as a whole, media makes up only 15%.

The top buyers of premium programmatic ads include: 

• PayPal
• Verizon 
• Liberty Mutual
• Geico
• L’Oreal

Collectively, these five companies made up 10% of all programmatic ad spend on premium formats.

Another buyer among the top ten spenders this year is Biden for President.

As political campaigns heat up, more sites will increase their political coverage. In a year marked by social unrest and economic inequality, advertisers may change their buying behavior as the election draws closer.

We’ll continue to monitor how advertisers behave as the year closes out— Q4 in 2020 will not likely be typical.

For more updates like this, stay tuned. Subscribe to our blog for more updates on coronavirus and its mark on the economy.

We oscillate between hard news stories and funny memes. We try to listen to the podcasts we miss from our daily commutes. Tigers and their masters have left their mark on our psyches. 

Our digital habits have changed. 

As people turn to streaming, news publications and social media to cope with this time of grief, advertisers are responding.

We analyzed the data to see how brands are capitalizing on the recent spike in media consumption. Overall digital ad spend was down in March, but many brands escalated their spending. 

Which digital media formats have been impacted most?

We encourage you to subscribe to our blog for the latest data surrounding the advertising industry. We will provide daily updates as COVID-19 continues to make its mark on the US economy.

How COVID-19 is Changing What We Watch and Listen to Online

Before the coronavirus crisis, Americans were already on their phones, watching TV or consuming digital media most of their days. 

Nielsen reported that before the pandemic, American adults spent almost 12 hours a day on a media platform. That number is likely to increase by 60% on average for those practicing social distancing.

Americans are spending more time consuming media and playing more video games, but they are also engaging with different platforms more (i.e. news) and at different times of the day.

For example, streaming behavior is going every direction. Prime time TV viewership is down. On the other hand, video streaming between 11am and 2pm is up 40%. Twitch streaming increased 23%, while audio streaming (i.e. podcasts) is down despite previous momentum . 

People are not limited by traditional work hours and can watch their favorite shows whenever they want. Professional sports are off the table and turning their fandom elsewhere. 

This new behavior is causing many companies to quickly reallocate their online ad spend.  

MediaRadar Insights: March Spending Across Digital Media Formats

In March, we saw brands collectively spend 3% less on digital media than they did in February. 

The overall dip in spending is not surprising considering the fragile state of the economy. Brands were more selective with the digital formats they invested in and not all formats were impacted equally. 

Native advertising saw the largest hit: there was a 10% drop in ad investment between February and March. Meanwhile, display experienced a 3% drop in spend.

When it came to video, however, brands jumped onboard. Overall video ad spend was up 8%.

In March, over 2500 brands bought online video advertisements. Of these brands, many accelerated their previous spending.

Notable brands that boosted their online video spend include:

• Masterclass spent over $1M in online video in March after doing very little in February.
• Microsoft Teams is up 57% month-over-month.
• Pandora spent over half a million in March on online video — after no online video spending in February. 

For more updates like this, stay tuned. Subscribe to our blog for more updates on coronavirus and its mark on the economy.

MediaRadar has revealed that the online video market was remarkably consistent over the course of the past year, with ad duration remaining almost identical year-over-year.

However, in 2019 there is some evidence that the market is recalibrating from its emphasis on shorter ads.

Video Ads Are Getting Decidedly (But Slowly) Longer

MediaRadar looked at all video ads in January and February of 2018 and the same months in 2019. The study broke video ads down into two cohorts: video ads running YouTube and video ads running everywhere else.

• The Headline: Video ads are getting decidedly longer — albeit in the least dramatic way possible.
• The Specifics: 30-second ads increased by 5 percent, while 12-16 second ads remained by far the most popular length.

The most remarkable part of MediaRadar’s findings is how steady ad duration is year-over-year. The research is not a story of dramatic, overnight change from 2018 to 2019.

Video ads for online platforms are clearly built for a specific format: they are most concentrated at 6, 15 and 30 seconds. 15 second ads are by far the most common, accounting for around 40 percent of all video ads running online.

You can see the preference for length on each end of the spectrum: there are almost no ads shorter than 5 seconds, and ads in the 30-second range are the second most popular. In the first months of 2019, ads in the 0-5 second range represented just 3 percent of all ads and 1 percent of YouTube ads. In contrast, 26-31 second ads represented a quarter of YouTube ads and nearly the same percentage of all ads running.

Year-over-year, this is a big shift for YouTube. 30-second video ads leapt from 19 percent to 24 percent of total ads on YouTube. This is by far the largest percentage shift for all ad lengths.

Other Findings from MediaRadar

• 6-second ads had twice the concentration on YouTube than everywhere in Q1 2018 — 20 percent versus 11 percent. The gap has started to narrow in 2019.
• In the first two months of 2019, 16.5 percent of ads on YouTube were 6 seconds but remained at 11 percent on all other media. Fewer advertisers are running short ads on YouTube.
• 15-second ads made up 47 percent of ads on YouTube and 40 percent of ads everywhere else. This has remained relatively consistent year-over-year.
• Although we assessed 6-7 second ads, the overwhelming majority of ads in this range (95 percent) were 6-second ads.

How These Numbers Fit Into Larger Video Ad Trends

Our numbers reveal a clear trend toward longer ads.

While the jury may be out on a concrete set of precipitating variables, one potential explanation for these increasing ad lengths is that consumers are increasingly using online formats for their media. As Internet slowly replaces traditional television with mobile video and OTT, consumers are more tolerant of longer ads ahead of their content – particularly if they are creative.

“For brand marketers, video continues to be the most important story in media, writes Kevin Hunt at The Drum. “Audience behavior is evolving rapidly across generations, and consumers now watch more than eight hours of online content every week.” Consumers tolerated 3 minute commercial breaks for traditional TV, the thinking goes, so why not a 30 second online ad?

The longer length also gives brands more room for experimentation. Rahul Chadha at eMarketer writes that diverting TV dollars to mobile video translates into more flexible formats to experiment with. 6-second ads, non-skippable ads and rewarded video ads all “give viewers more control of their ad experience by trading their attention for something they value.”

If you’re a company advertising on the web, you face stiff competition and a steep learning curve. Grabbing mobile users’ attention isn’t easy, and choosing the right video ad format and length can help you break through the noise.

At the same time, creatives will consistently need to remember the they have a short amount of time to draw viewers in — particularly since most longer ads on YouTube are still skippable after five seconds and non-skippable ads are capped at 20 seconds.

In the past year, YouTube has been inundated with grievances, regarding their brand safety. 250 brands actually stopped advertising on YouTube at one moment in time because they felt like their inventory was at risk. Half of advertisers still say YouTube has done a poor job with managing quality. With YouTube in its most vulnerable state, Instagram’s IGTV could threaten the platform’s monopoly on long-form advertising.

The panel consisted of five advertising experts.

MediaRadar Co-Founder and CEO, Todd Krizelman was among the panelists. He was joined by four others, all with various, but impressive backgrounds.

The Moderator

Kerry Flynn (@kerrymflynn) | Media Buying & Platforms Reporter, Digiday

Kerry Flynn is a business reporter who started in newspapers as a student and intern, drifted to magazines like Forbes, and now has spent the past few years in the online media industry. She recently moved from tech reporting at Newsweek Media Group and Mashable to the advertising beat at Digiday to analyze how digital platforms have altered brand strategies. Flynn is a graduate of Harvard University.

The Panelists

Kaydee Bridges (@kaydeebird) | VP, Digital & Social Media Strategy, Goldman Sachs

Kaydee Bridges’ digital and social media work at Goldman Sachs has won several awards from Midas, Digiday Content Marketing Awards, and the Financial Communications Society. Previously, Bridges was at JPMorgan Chase for 10 years, most recently as Vice President, Digital and Social Strategy in the Digital Marketing Group. She also worked in JPMorgan Chase’s Global Philanthropy group, where she launched and led the firm’s first presence on Facebook: Chase Community Giving, a crowd-sourced philanthropic program, which donated over $30 million to thousands of charities. Bridges holds an MBA from The University of Chicago Booth School of Business and a BSFS in International Politics from Georgetown University.

Elijah Harris (@RepriseMedia) | VP, Head of Social Media, US, Reprise Digital

Elijah Harris leads all paid social efforts across Mediabrands US, where he is responsible for driving the discipline’s growth and expansion, as well as the development of the agency’s core product capabilities. Elijah is passionate about data-driven performance, with nearly ten years of experience across the digital landscape. He teaches the agency how to leverage social data and insights to make informed decisions on behalf of Reprise brands. His approach is grounded in a meticulous analysis of the consumer and a solid understanding of the ever-evolving media landscape. Reprise’s clients include Coca Cola, Spotify, Merck, BMW, and Accenture.

Todd Krizelman (@ToddKrizelman) | Co-Founder & CEO, MediaRadar

Growing up in Palo Alto, Todd Krizelman was born and raised near the epicenter of technological innovation. Krizelman joined veteran web architect, Jesse Keller, to found MediaRadar in 2007. After years of thorough research, development, and data collection, MediaRadar is now the most comprehensive data company focused on the ad sales market. He previously co-founded one of the world’s first social media sites, theGlobe.com, and led the site from inception to taking it public on NASDAQ. Krizelman is a graduate of Cornell University and Harvard Business School.

Noah Mallin (@NoahMallin) | Managing Partner, Head of Experience, Content, Sponsorship, Wavemaker North America

Noah Mallin is a marketing and advertising veteran with more than a dozen years of experience across three holding companies and a slew of Fortune 500 clients. He’s currently the head of the Content and Experience practice for Wavemaker North America, part of WPP’s Group M set of media agencies. Leading a team of specialists, Noah leverages his innovative mindset to build a data–driven purchase journey approach to compelling marketing, winning a Cannes Gold and Silver Lion in 2017 for Marriott’s MLive creative data suite among other awards. Wavemaker’s clients include IKEA, L’Oreal, Danone, Church & Dwight, Mike’s Hard Lemonade, and Adobe.

Brittany Richter (@belizabeth86) | VP, Head of Social Media, US, iProspect

A passionate and driven integrated digital marketing professional, Brittany Richter specializes in social media, specifically in paid social strategy and strategic activation. Richter has experience teaching at the college level, speaking and presenting workshops at conferences, corporate trainings, and career counseling sessions. Her workshops incorporate market research by creating, designing, implementing, and evaluating attitudinal survey instruments. Richter is a double alumna of the University of Delaware, earning both her Bachelors and Masters there.

The Space

The Instagram vs. YouTube panel was held at the gorgeous Helen Mills event space in midtown Manhattan. The beautiful space and incredible food would have served as enough for visitors, but that’s only where the night began.

Three Takeaways

1. Instagram’s IGTV has transformed and expanded

What about Instagram’s IGTV has changed?

According to Elijah Harris, IGTV showed him long-form content from people he followed on Instagram, something he often didn’t want. But, that was just at the start. Now, the platform offers more opportunities for him and others to explore.

MediaRadar CEO, Todd Krizelman, also answered that “IGTV is testing a lot of paid advertising and a lot of top 40 hits right now. But, it still feels more like a professional and academic interest to me than one of leisure.”

2. YouTube still wins the popular vote

As a brand, where do you go first and why – YouTube or IGTV?

The majority of panelists agreed that brands should start off with YouTube rather than Instagram’s IGTV for various reasons. To back their claims, the speakers listed the following benefits of YouTube: “cheaper,” “long-form content like podcasts perform better on YouTube,” and it’s “better for sharing.”

Yet, Elizabeth Richter, iProspect’s Head of U.S. Social Media, disagreed. She aptly argued that “if a brand is struggling with their messaging, then, Instagram’s IGTV is best for them because they can then experiment with different brand messages and see how their consumers respond.”

3. The future states of Instagram’s IGTV and YouTube

What do Instagram’s IGTV and YouTube need?

For Instagram’s IGTV, Elijah Harris of Reprise Digital says, “Depends what it wants to be. If it wants to be YouTube, it needs meta tags and better discoverability. If it wants to be Snapchat, it needs curated content and MCN (multi-channel network) participation.”

Mallin, Managing Partner at Wavemaker North America, added that “It also needs breakout content … Even Vine, which I’m still mourning, there was amazing content there.”

Now, for YouTube, Mallin argues that “It needs to get more mobile. It’s still stuck in its desktop roots.”

Today, we’re instead going to take a month-by-month look at how the year shaped out.

Our hope is to take you on a time-trip of the year that was, by looking at the most watched ad from each month, individually.

What’s interesting, is how different a monthly recap looks compared to a yearly recap, with only a few of the yearly leaders appearing as monthly leaders.

The ads with the most yearly views typically have more powerful, long-lasting messages, while the monthly leaders are more product and time-focused. They’re quick-hitters, product releases, and event ads, reminding us of the holidays and times of year that drive our culture, and drive revenue for advertisers.

Our monthly recap also showed us that, much like Snapchat, YouTube advertisers also look to capitalize on a very youthful, mobile-driven audience, as many of the ads were for phone releases and mobile games.

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It’s no surprise that vertical video has dominated the mobile advertising landscape—thanks to platforms like Snapchat and Facebook’s 2016 introduction of vertical video ads normalizing the “tall and thin” mobile ad-viewing experience. Vertical video allows consumers the convenience of viewing video ads full-screen, while still holding their phones upright—a modern day miracle!

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It’s no surprise that vertical video has dominated the mobile advertising landscape—thanks to platforms like Snapchat and Facebook’s 2016 introduction of vertical video ads normalizing the “tall and thin” mobile ad-viewing experience. Vertical video allows consumers the convenience of viewing video ads full-screen, while still holding their phones upright—a modern day miracle!

This relatively new format is becoming more popular among mobile advertisers. In Q1 of 2017, MediaRadar found 112 mainstream websites ran vertical video ads—leaving a window of opportunity for digital advertisers to embrace this eye-catching ad format.

Early adopters of vertical video, however, are more sophisticated publishers with enough financial resources to fund innovation. We found key players include divisions at Hearst, Condé Nast, Time Inc., Business Insider, and AOL.

We also learned, top advertisers leveraging this ad format fall into the media industry, placing ads for TV programming and films ranging from the new Star Wars film Rogue One to the new Lost City of Z. Vertical video also presents a tremendous opportunity for categories such as luxury fashion that buy very little on linear TV. Dolce & Gabbana, Chanel, and Tommy Hilfiger have all produced vertical video ads in Q1 2017, ranging from 3 to 15 seconds in length.

Through the analysis conducted by MediaRadar, we learned 70% of vertical video advertisers are running 15-second spots, but it isn’t uncommon for these spots to range from 5 seconds to 90 seconds in length. Vertical video also presents the advertiser with the creative option of implementing a split or full-screen format. Split format ads host a horizontal video in one section of the vertical ad, while full-screen format uses the full frame of the vertical ad to run the video.

Vertical video shows great potential for capturing attention in a relatively short amount of time. Though there is lopsided adoption today, growth in other high-CPM formats is a likely precursor to more advertisers across industries investing in vertical video.

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