The numbers don’t lie: video ad spending is expected to grow 16% and reach a whopping $63 billion in 2024. Video advertising is seamlessly woven into viewers’ streaming preferences, social feeds, and even their online shopping experiences. For video businesses, this unlocks a whole new advertising landscape.
Let’s dive into the key areas to watch and how your business can get ahead of the curve.
The Rise of Digital Video
Here are the main trends that will drive this multi-million dollar industry.
Connected TV (CTV) and Social Video Keep Growing
CTV advertising is becoming the new primetime as streaming services steal viewers away from traditional TV. Namely, the connected TV ad spend is expected to reach $22.8 billion in 2024. The trend is projected to rise gradually over the next few years, ultimately reaching $31.6 in 2028.
Moreover, short-form video platforms like TikTok and Instagram Reels continue to rise. Their engaging, bite-sized ad formats are capturing audience attention and generating impressive returns.
The numbers suggest that social video will keep rising at a rate of 20%, reaching $23.4 billion in revenue in 2024. This represents a 32% faster growth than total media overall.
Furthermore, CTV and social video are highly sought-after advertising channels by major brands, as they offer the unique ability to target specific audiences while achieving both brand awareness and measurable sales outcomes.
Specifically, 70% of the biggest ad spenders considered social media necessary for their media plan, while 69% thought CTV was a “must buy”.
Finally, while traditional media budgets are increasingly being reallocated to CTV, there’s also a growing trend of non-video digital ad budgets shifting towards CTV. This reflects its growing importance across various advertising channels.
Industry survey results state that 40% of the funding sources for CTV are reallocated from linear TV, and only 26% come from audience-based linear TV.
Consumer Packaged Goods (CPG) and Retail – The Biggest Contributors to Digital Video Growth
The forecast for the 2024 digital video ad spend shows a double-figure YoY growth for the CPG and retail sectors.
CPG is expected to grow 20%, while the retail sector will likely notice a 30% raise. These contributors will lead this unprecedented growth, driven by CTV’s expanded reach and targeted advertising capabilities.
Other categories, including auto, financial, restaurants, B2B, wellness, and travel will also grow more than 20%.
David Cohen, CEO of IAB, commented that advertisers follow consumers, and currently, that means digital video. He emphasized the challenge of delivering the best viewing experience, content choices, and advertising options in a crowded landscape, asserting that this competition ultimately benefits both consumers and the industry.
What Does This Mean for Video-Based Companies?
The convergence of CTV and social video presents a multifaceted landscape of opportunities for video-based businesses, offering avenues to enhance reach, engagement, and ultimately, revenue generation:
Connected TV (CTV) Opportunities
CTV ads are considered less intrusive and of higher quality compared to other digital formats. The positive association translates to increased viewer engagement, as audiences are more receptive to content they perceive as premium.
Moreover, CTV’s longer ad format allows for deeper storytelling and emotional connections with viewers, leading to increased brand recall.
These extended narratives enable brands to deliver their message more effectively and leave a lasting impression on viewers.
The precise targeting capabilities on CTV platforms further enhance the effectiveness of video advertising. Businesses can reach specific demographics, interests, and viewing habits, ensuring that their ads are seen by the most relevant audience groups. This laser-focused approach not only improves ad performance but also maximizes return on investment.
Additionally, CTV platforms provide detailed analytics on viewer behavior and ad performance, providing businesses with valuable data-driven insights. These insights allow for ongoing refinement of targeting strategies, content optimization, and overall campaign effectiveness, leading to continuous improvement and greater success.
Social Video Opportunities
Social video platforms offer affordable options with the potential for vast organic reach. Therefore, smaller businesses can experiment with various formats, fostering a more diverse and innovative advertising landscape. This emphasis on creativity helps brands stand out in a crowded market and resonate with younger, tech-savvy audiences.
The viral nature of social video content also presents immense opportunities for brand exposure. Trending challenges, shareable content, and user-generated campaigns can rapidly amplify a brand’s message, leading to exponential growth in awareness and engagement.
Lastly, influencer collaborations on social video platforms provide a powerful tool for expanding brand reach and authenticity. Research shows that 44% of Gen Z consumers rely on influencers when making a purchase. Partnering with influential creators allows businesses to tap into established communities and leverage the trust and credibility these influencers have cultivated with their followers, thus building genuine connections with potential customers.
Final Thoughts
The trends and statistics surrounding video ad spending in 2024 paint a dynamic and promising picture for video-based businesses, but one that requires strategic adaptation and agility. The explosive growth in CTV and social video advertising presents an unprecedented opportunity for these businesses to reach wider audiences and engage viewers in novel ways.
By understanding these trends and proactively adapting to the changing landscape, video-based businesses can capitalize on the opportunities presented and solidify their position in this rapidly evolving industry.