Facebook has just acquired LiveRail, a leading online video advertising platform, and the move is indicative of just how important video and video ad tech are becoming to publisher’s revenue streams.
LiveRail was the top U.S. video ad property in March 2014 by number of ads served (see BI Intelligence chart right), at nearly 3.9 billion, according to comScore. LiveRail, which connects publishers and advertisers, has customers including PBS and Sony Pictures.
Online video ads are one of the fastest-growing ad mediums, far outpacing growth in spending on television and other digital formats, so it makes sense that Facebook would be going after one of the biggest video ad properties out there. Online video ad viewing exploded in 2013. Over 35 billion video ads were viewed in the U.S. in December.
In a new report from BI Intelligence we explore the key drivers of the skyrocketing growth of video ads, examine the cost and performance of the emerging digital ad format, and look at the major players that are shaping the industry.
Here are some of the key trends we explore in the report:
- Online video ad revenue will reach nearly $US5 billion in 2016, up from $US2.8 billion in 2013, while TV ad revenue will decline by nearly 3% per year during the same time period.
- Video ad views exploded in 2013, topping over 35 billion views in December, averaging over 100% year-over-year monthly growth during the year.
- Online video ads are significantly more expensive than other formats, but prices are steadily declining as more publishers rush into video, and placements open up.
- Video ads have an average click-through rate (CTR) of 1.84%, the highest click-through rate of all digital ad formats.
- Viewability, the question of whether video ads are actually seen by multitasking online viewers, has emerged as an issue, but we believe that overall demand for online video is too high for viewability to put too much of a crimp in the video ad market.
- Streaming devices and connected TV accounted for just 2% of online video ad views in the fourth quarter of 2013, but companies like BrightLine are experimenting with formats to grow this new niche market.
In full, the report:
- Explores the key drivers of the growth of online video ads
- Examines how video ads stack up against other digital advertising formats in terms of both cost and performance.
- Looks at the issue of viewability, and explains how the problem could impact future spending on video ads.
- Outlines the major players in the video ad space.
- Explains how startups like BrightLine and Alphonso are using innovative approaches to bridge the gap between digital and TV ad spend.