2018 was a landmark year for digital advertising, as it was the first time that digital ad spending exceeded TV ad spending. Video advertising was a significant reason why the industry achieved this milestone. With users spending more time streaming content on mobile devices, brands are shifting their advertising dollars away from TV to reach users on their mobile phones. It's looking like 2019 will be another big year for video advertising. With that in mind, here are a few major trends to look out for this year.
OTT Devices Reach New Heights
The hype for over-the-top (OTT) devices reached a fever pitch in 2018. In 2019, these devices can reach their full potential.
According to the IAB, an OTT device is a device that "can connect to a TV (or functionality within the TV itself) to facilitate the delivery of Internet-based video content (Roku, Apple TV, Smart TV’s, game consoles, etc.)." OTT devices aren't a new product by any means, but their potential for digital advertising is attracting a lot of attention.
While popular services like Netflix are subscription-based rather than advertising-based, there are ample opportunities for advertisers across other services. The projected growth numbers back this up. OTT ad spending is expected to double by 2023 to $46.6 billion.1 Advertisers are always hungry to reach viewers of premium video content, and OTT advertising fulfills that need perfectly.
Augmented Reality Reaches Its Potential
There have been engaging examples of augmented reality (AR) advertising in the past, but the medium was always a bit out of reach for smaller advertisers. Creating a campaign for AR was cost prohibitive to do right. In 2019, that's all changing, and AR is becoming democratized.
As the numbers of AR users steadily increase, the price of creating AR advertisements is getting dramatically cheaper. Apple offered some powerful AR development tools when they rolled out iOS 12 in September 2018, which will help popularize the medium. Meanwhile, companies like Facebook are also offering their own tools for AR advertising. Snapchat is the best example of this democratization. AR ads once required a $500,000 minimum on the app. Now there's a $50 tier that's accessible to just about every advertiser.
With these major players making AR more prevalent, advertisers of all sizes can start getting involved. Meanwhile, publishers of AR apps can find willing buyers for their inventory.
Publishers Refocus on Video
2018 was a challenging year for podcasts. While the industry as a whole continues to grow, big-time content producers like Buzzfeed and Audible scaled back their podcast creation efforts. In the case of the former, the decision was made to refocus on video production.
While podcasts still have promising potential for advertisers, video is a proven quantity. In 2019, you can expect publishers to amp up their video content production. The demand for continued video advertising is too high to ignore.
Hello, Vast 4.1. Is VPAID-i Next?
Video ad specifications received a big update when the IAB released the final specs for Vast 4.1 in November 2018. Vast 4.0, launched in 2016, was a step in the right direction in building a video ad standard for mobile, but it wasn't perfect. Vast 4.1 goes much further as the IAB designed it with mobile and OTT in mind.
Once the standard is fully adopted in 2019, video advertising will improve industry-wide. The main benefits will be improved viewability, greater transparency, and better video ad delivery. What's not to like?
VPAID, known for providing interactivity to video ads and also for its viewability measurement, is expected to receive an update when the specs for VPAID-i (that's a working title at the moment) are released. Many advertisers liked VPAID not so much for the interactivity, but rather for the viewability measurement it provided. The measurement aspect wasn't the intended main feature of VPAID, but it became something of a hack to obtaining a trustworthy viewability measurement.
Fortunately, the new VPAID spec will simplify things by being dedicated to interactive video ads. The IAB's Open Measure Standard released in early 2018 will handle the measurement aspect. All these changes to video-related specs will hopefully bring in 2019 some more clarity and transparency to the sometimes confusing world of ad tech.
Vertical Video Ads Poised for Growth
In September 2018, YouTube announced that they'd be rolling a new vertical ad format. Joining the ranks of the other big social media platforms, vertical video ads are tailor-made for users on their smartphone. YouTube said this ad format helped one automaker receive a 33% uplift in brand awareness compared to horizontal ad formats.2 Those are promising numbers that bode well for this fast-growing ad format.
With YouTube fully committed, and the general rise of video content offered vertically, this vertical video ad format will be huge in 2019 as it spreads to other apps.
Rewarded Video Rising
It's not a bold prediction to say that rewarded video will continue to rise in popularity as an ad format. Out of all the video ad formats out there, rewarded video is the favorite of users by a large margin.3 These users are happy to watch an ad if it's in exchange for an in-app reward. Meanwhile, advertisers are thrilled to reach engaged users. With all the positive things going in rewarded video's favor, this format has exploded in popularity throughout 2018. We expect that trend will hold throughout 2019.
Short Video Ads Are Still in — With a Catch
2018 was the beginning of the "era of six-second ads." What's not to love about this ad format? Six-second ads are proven have high view-through rates and are well-liked by users. This video ad format is here to stay, no doubt, and will continue to grow in 2019. However, there are some downsides to this hyper-short format that are becoming evident. What this means is that savvy marketers won't be completely relying on six-second video ads in 2019.
One downside is the constraints of creating a compelling message for just six seconds, but that's nothing new and clever advertisers have managed to make memorable ads with these limitations. However, research released in late 2018 shows that these short ads pack a limited emotional punch. By one measure, 30-second ads were 42% more effective than shorter ads in eliciting emotion.4 That higher emotional response correlated directly with higher sales.
Knowing this, the best advertising campaigns in 2019 will feature a mix of short and longer-form video ads in order to find success. Relying too much on one or the other should be left behind to 2018.
5G Not Yet Ready for Primetime
Everyone in the mobile industry, from advertisers to publishers to data providers, is excited about 5G. With speeds of more than 20 times faster than current 4G networks, this development can have an especially huge impact on video. Users can stream large, high-quality videos faster than ever before, suggesting that time spent in video will increase to new heights.
As exciting as this all is, 2019 won't see any significant progress in terms of 5G penetration. Most forecasts show that the number of 5G users will remain statistically insignificant in 2019 as the network is built out. In 2020 and beyond is where the numbers really start to grow. For now, we'll all just have to wait.
Looking Ahead With Video Advertising
So what else will 2019 have in store for video advertising? There could be some surprise and unexpected developments, but at this point, it's hard to predict much more. However, you can bet that video advertising will continue to grow in 2019 and beyond. As an ad format, video's popularity has nowhere to go but up.
Sources: 1WARC, October 2018 2The Drum, October 2018 3AdColony, October 2017 4Teads and Realeyes, November 2018