Social media ads to hit $50 billion by 2019 — Zenith

The amount of money spent on advertising on social media is set to catch up with newspaper ad revenues by 2020, a leading forecaster said on Monday.

The rapid expansion of social media platforms on mobile devices, as well as faster internet connectivity and more sophisticated technology, has triggered a huge shift in the way many people get their news.

Advertising agency Zenith Optimedia, owned by France’s Publicis, predicts global advertising expenditure on social media will account for 20 percent of all internet advertising in 2019, hitting $50 billion (39 billion pounds) and coming in just one percent smaller than newspaper ads. It expects social media to overtake newspapers comfortably by 2020.

“Social media and online video are driving continued growth in global ad spend, despite political threats to the economy,” Jonathan Barnard, head of forecasting at Zenith, said.

The media industry has been convulsed by the rapid shift in advertising trends in recent years, with firms moving their ad budgets from traditional sources such as newspapers to websites found on computers and mobile phones.

Marketers are increasingly directing their spending to social media sites where ads blend into users’ newsfeeds on platforms such as Facebook and Snapchat proving more effective than interruptive banner formats.

Zenith’s report forecasts that global advertising expenditure will grow 4.4 percent in 2017, the same rate as in 2016, which it said would be a strong performance given that big events like the Olympic Games, Britain’s EU referendum and the U.S. presidential election boosted advertising this year.

Online video advertising is also rapidly growing and set to total $35.4 billion across the world by 2019, fractionally ahead of the amount spent on radio advertising but still far less than television.

Global spending on advertising has been stable since 2010 the report showed, although growth has declined in the Middle East and North Africa. It was expected to continue to grow strongly in China and much of Asia.

source: interaksyon.com

Facebook rolls out video ads, aims to capture part of TV-marketing budgets

SAN FRANCISCO — Facebook Inc will allow more marketers to run video advertisements on its website, provided the world’s No.1 social network deem them to be of high-enough quality.

Facebook and social media rivals like Twitter are increasingly trying to grab a slice of lucrative TV-marketing budgets as they try to sustain rapid growth. That market is considered crucial to supporting Facebook’s growing market valuation and poses a potential long-term threat to traditional TV networks.

Facebook has moved cautiously to avoid annoying users. Social media players like Twitter are typically careful not to clutter up their users’ pages with unwanted material.

The 15-second video ads, which appear in newsfeeds and will play automatically with sound muted, will become available to a limited number of marketers over the next few months, Facebook said on its official blog on Thursday.

It first tested video ads with a single advertiser in December. Facebook said Thursday that video ads will be available to a “a select group of advertisers,” without details.

The price that marketers pay to run a video ad on Facebook will be determined by the size of the audience as measured by measurement firm Nielsen, Facebook added. Marketers will be able to choose specific times of day for their spots and will be able to target ads according to age and gender.

However, Facebook said it would review the creative quality of any video spots that appear on its website, assessing ads for criteria such as watchability, meaningfulness and “emotional resonance.” Such reviews will be done in partnership with video analytics firm Ace Metrix.

“We’re taking this step in order to maintain high-quality ads on Facebook and to help advertisers understand what’s working to maximize their return on investment,” Facebook said in the post.

source: interaksyon.com

As world of gadgets grows, online industry tunes in to video ads

SAN FRANCISCO — Internet video ads, long a sideshow in the online advertising market, are gaining in importance to marketers and Web publishers as they look to capitalize on consumers’ changing viewing habits and tap a $70 billion television market.

The ever-expanding array of gadgets that display online video, from tablets to Internet-connected TVs and DVD players, along with technology such as social media that facilitates distribution, has spurred new interest.

The growing trend means websites like Google Inc’s (GOOG.O) YouTube, Yahoo (YHOO.O), AOL (AOL.N) and Hulu have a better shot at tapping the mother lode of television advertising budgets, though video ads have a long way to go before they become as dominant a part of the marketing landscape as TV ads.

Research firm eMarketer says video is the fastest growing form of online advertising, with spending increasing 46 percent last year, and outpacing popular formats such as search ads and display ads.

Google does not break out financial results for its YouTube business, but CEO Larry Page said on Tuesday that spending among YouTube’s top 100 advertisers increased by more than 50 percent in 2012 compared with the year before.

There have been media reports that Facebook is developing a video ad service, and analysts will likely be looking for answers on that avenue when the social networking giant delivers its quarterly results on Wednesday.

At Yahoo, “one of our highest priorities was to create more online video experiences, because that’s where the demand is for advertising,” said Tim Morse, the former Yahoo finance chief who became CFO of video advertising technology company Adap.TV this month.

Advertisers are increasingly fond of video ads, Morse said, because of the similarities to TV.

“It’s the closest to what they’ve had offline. They’re looking for the same kind of medium where they can connect with consumers,” he told Reuters.

Turning point

Chevrolet has been running online video ads for several years, but significantly ramped up its activities and investment in 2012, said Carolin Probst-Iyer, the manager of digital consumer engagement for the General Motors (GM.N) division.

“Last year was a bit of a turning point,” she said, as Chevrolet put greater emphasis on creating original video ads and looking for new ways to distribute spots, rather than simply running existing TV ads on YouTube and TV network websites.

One recent ad for the buzz-worthy new Corvette Stingray was viewed more times on mobile devices than it was on PCs, she said.

For Web publishers, video ads are good business. While typical banner ad rates can generate a few dollars per thousand views, video ad rates can reach $20 per thousand views, said eMarketer’s David Hallerman.

“All of the Internet advertising to date has come from print sources,” such as newspapers, magazines and yellow pages, said RBC Capital Markets analyst Mark Mahaney.

“We’re are at a point where television ad budgets are likely to come online.”

The explosion of new screens such as smartphones and tablets greatly increases the venues where consumers can watch video, whether they’re at their desks or on a bus. And social networking, which makes it easy for users to share favorite videos, has given marketers added incentive to produce video ads that can gain additional exposure by tapping into the social slipstream.

YouTube’s head of industry development, Suzie Reider, said marketers are increasingly developing ads that are tailored for specific audiences, making it more likely that Web surfers will actually watch them.

“We’re living in a day and age where nobody has to watch an ad that they don’t want to watch,” said Reider. “You can skip them on the Web, you can skip them on TV.”

To make its website more appealing to advertisers, YouTube has helped create hundreds of “premium channels” featuring professionally produced video as opposed to the amateur clips YouTube is famous for. And it’s developed a type of video ad that users can skip after five seconds – advertisers only pay if the ad is watched all the way through.

Price deflation?

Despite the growth in Web video ad spending, which eMarketer estimates reached $2.93 billion in the United States last year, the firm said the spending still represents only about 10 percent of the broader online advertising market.

And that is a mere drop in the bucket compared with the $68 billion that Kantar Media estimates was spent on television advertising in 2011.

One potential constraint is the way big brands and agencies organize their marketing budgets, says Pivotal Research Group analyst Brian Wieser. Online video ads are typically funded from Web ad budgets rather than a much larger pool set aside for TV.

Analysts also note that the rich rates websites collect for video ads will decrease as more Internet sites open to ads – something that’s already happening thanks to technology that automatically pairs ads with videos on websites.

Still, many analysts and industry executives are optimistic about what they see as the bigger picture.

“The number of people watching TV seems to be stagnating or declining, and the number of people turning to the Internet for entertainment is surging,” said RBC’s Mahaney. “It almost inevitably drives these TV budgets online”

source: interaksyon.com