Follow the Money - The Rise of Native Video


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Consumer trends are evolving.  2016 marked the first year that consumers made a majority of their purchases online rather than in store, according to an annual survey by comScore. This shift is leading to the slow death of traditional retail, with major retailers such as Macy’s and Sears closing stores across the country. Purchasing goods digitally has become incredibly easy and pain-free thanks to the likes of Amazon. In fact, 44% percent of smart phone users made purchases on their phone in 2016, according to that same comScore report.

In similar fashion, traditional TV viewing is shifting to digital, with people ages 18 to 24 spending nearly 30% less time per week watching TV than they were in 2012, and those 24 to 35 dropping at a rate of 18% according to Nielsen.   The millennial age bracket spends more money online than any other age range. With this in mind, it is not surprising that advertisers are shifting their ad strategy to continue capturing the younger demographics.

With any trend evolutions there are growing pains, the time it takes to understand how to best monetize new ad formats and how consumers prefer to digest the information provided. This has occurred with digital advertising. There is a clear shift to higher quality ad placements, including native and video, but also to more accessible ads placements such as mobile.

What we see at MediaRadar:

MediaRadar’s data shows, the duration of video ads is decreasing, but the proliferation of such ads is rising. Year-over-year we’ve seen growth to the rate of 43% in overall video ads. The two largest sectors of growth are in ads 15 seconds or under (54% increase) and ads between 15 and 30 seconds (42% increase). These two time portions of ads, also make up 79% of all the video ads we saw in Q1 of this year. The duration of ads goes hand-in-hand with a viewer’s ability to skip said ad. MediaRadar also shows that ads under 30 seconds are half as likely to have a skip option as those that exceed 30 seconds.

The number of brands placing video ads is up 17%, those placing mobile ads are up 14.4%, and those placing native are up a whopping 59% year over year. In contrast, brands placing ads across the major broadcast TV networks are down 2% YoY. Advertising is getting smarter, and with the influx of data associated with smart phones, tablets and other such technology, it is better to tailor ads for individual consumers.  With the controversy surrounding skipping ads and ad engagement, it seems likely that product placement within videos and shows themselves will continue to grow.