Video ad budgets soar as CPMs rise

Video ad budgets soar as CPMs rise
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Video ad budgets have rocketed by a third on the last year, while publishers are experiencing CPMs 16% higher than last year, according to new research from IAB Australia and Adap.tv.

According to the annual State of the Video Industry report the increased budget allocation is coming from a range of sources, not just TV, with a total of $112m spent in financial year 2013, up 43.5% from the year before.

Other takeouts from the study show 58% of buyers plan digital video spend alongside TV, but buying tends to fall into digital groups still, while more than half of the market believes inventory is scarce.

Phil Duffield, Adap.tv’s MD for Asia Pacific, said: “Brands are demanding a cross-screen campaign approach yet, in many cases, agencies are still in planning silos.

“This isn’t unique to Australia, but our reports in other parts of the world show we might be a little slower off the mark here.”

According to the study 44% of respondents said increased budgets are being drawn from print and online display, with 38% taking cash from free-to-air TV, 25% pay TV, and 11% incremental increase.

However, a lack of premium inventory was cited by 45% of publisher and ad network execs as the main barrier to growth, although only 36% agency side said this was the issue.

Similarly a lack of long-form and Australian content were also cited as concerns, as well as a lack of catch-up TV.

However, when it came to training and education they were united with 23% asking for more of it, while agencies are more concerned with a lack of measurement (15%) than publishers (4%) and a lack of creative standards (13% v 9%).

Gai Le Roy, director of research for IAB Australia added: “We know that with online video often planned alongside TV campaigns, there is a growing urgency for cross-platform measurement capabilities.

“As an industry we need to provide benchmarks locally and also to measure ourselves against progress in other parts of the world.”
Publishers have increased their inventory by an average of 31% in the year, and experienced a 16% rise in CPMs. Buying premium content from six to 12 months in advance is also seen as important by the majority of buyers.

There is conjecture as to how the market will pan out, with debates about fragmentation and consolidation, whether there will be an increase in programmatic buying, if long or short form content will be the most engaging and if it is better to target niches against large reach opportunities.

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