Pre-DMEXCO Forecast: Online Video Driving Ad Industry Growth

Here are a few handy stats to have on the eve of DMEXCO 2017: Online video ads, social network in-feed ads, and other digital formats will drive a 14 percent annual growth in display advertising between 2016 and 2019.

Display spending will rise from $84 billion U.S. in 2016 to $126 billion U.S. in 2019, which will make up 64 percent of the total growth in global ad spending. Most of that growth will come from online video (increasing by 21 percent per year) and social media (growing at 20 percent per year).

That data comes from Advertising Expenditure Forecasts, a recently published report by Zenith, part of Publicis Media. Online video does a better job than traditional banner display ads at conveying brand value, Zenith notes, adding that video advertising is now a central part of the growth strategies for most social media platforms.

Television and online video together accounted for 48.5 percent of brand advertising spend in 2016, which is a 43.7 percent increase from 2010. That combined share will rise to 49.3 percent in 2019, Zenith predicts. While TV and online video ads are still sold and categorized differently by third-party agencies, Zenith notes that the increased use of connected TV devices make the two areas blur together in the minds of consumers. As a result, advertisers now see value in planning TV and online video campaigns together.

"At a time when big advertisers are keeping careful control of their ad budgets as they face intense competition from innovative new rivals, innovation in digital ad formats is what's driving growth in the global ad market," says Jonathan Barnard, head of forecasting and director of global intelligence for Zenith.

Global ad spend in total will rise 4.0 percent this year, Zenith says, growing to $558 billion U.S. Look for even stronger growth in 2018 thanks to the Winter Olympics, World Cup, and U.S. mid-term elections.

Troy Dreier's article first appeared on OnlineVideo.net