IAB Report: Ad Budgets Shifting from TV to Digital

NEW YORK: According to the second annual Digital Content NewFronts: Digital Video Spend Study, 68 percent of marketers and agency executives expect to see their digital video ad budgets increase in the next 12 months, while 67 percent anticipate their broadcast and cable TV ad budgets to stay the same or decrease in the next year.

The survey, conducted by Advertiser Perceptions and released by the Interactive Advertising Bureau (IAB), predicts that the greater investment in digital video will come from rising advertising budgets in 2015, and a shift in funds away from broadcast and cable television.

The study further revealed that two-thirds of marketers and agency executives (67 percent) believe that original digital video will become as important as original TV programming within the next three to five years. In order to close the gap between digital video and TV programming, both groups will be looking for digital to demonstrate its ability to develop effective sales and branding opportunities and produce metrics that are consistent with TV.

Advertisers across automotive, consumer packaged goods (CPG), financial services, retail and telecommunications have plans to devote more dollars to digital video, and the majority (67 percent) anticipates moving a portion of spend out of TV to do so. CPG, financial services and telecommunications marketers expect the greatest impact to be on their cable TV budgets. In comparison, despite planning cuts to broadcast and cable TV, two-thirds (63 percent) of automotive advertisers say they are most likely to get the funding from expanding budgets.

“This study demonstrates unequivocally that digital video is a fierce competitor for advertising dollars,” said Sherrill Mane, the senior VP of research, analytics and measurement at IAB. “Brand advertisers and media buyers have been dramatically increasing their commitment to digital video, so all signs point up for this captivating form of storytelling as the industry rallies for the NewFronts.”

“The extent to which the NewFronts are driving big dollars to original digital video content and shaping the marketplace is evident,” added Anna Bager, the senior VP of mobile and video and general manager of the Digital Video Center of Excellence at IAB. “Marketers and agencies are planning to direct more of their budgets to digital video, and a significant number of these spending decisions will be made as a direct result of NewFronts presentations over the next two weeks.”