The past several days have been ripe with intriguing video-marketing data points coming out of the 2017 Digital Content NewFronts. Here are eight figures that grabbed our attention:
1. Video advertising spend explodes
According to the Interactive Advertising Bureau, the average annual ad spend around original digital video content—defined as being professionally produced for digital consumption—will be $4.4 million for 2017, nearly doubling from $2.4 million in 2015. To arrive at that finding, the IAB surveyed 358 marketing and media buying professionals—with about half working at agencies and half on the client side—who manage annual ad spends larger than $1 million.
Video is a hot space across the board, the trade organization found, with the average digital/mobile video ad spend increasing 67 percent from 2015 to $9.4 million this year.
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With perhaps its boldest bet yet, YouTube is going directly after traditional television advertising dollars with 40 new programs exclusively for the platform. And advertisers appear to be coming back to the fold after brand-safety concerns rocked YouTube several weeks ago.
Tonight, at the digital giant’s BrandCast event in New York, YouTube chief business officer Robert Kyncl announced that celebrities such as Ellen DeGeneres, Kevin Hart, Ryan Seacrest and Demi Lovato are creating shows. The big pitch to marketers came toward the end of the first week of the Digital Content NewFronts.
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Snap Inc., the newly public corporate parent of Snapchat, makes its money by telling advertisers that it has a base of young, obsessed users who can’t be reached as easily anywhere else.
That claim has met more skepticism lately as Facebook’s applications rush to copy Snapchat’s most popular feature — a tool that allows people to upload video snippets of their day, which disappear after 24 hours. The copycat feature has been most popular on Facebook’s Instagram, where it’s used by 200 million people daily, more than Snapchat’s entire app.
But Snapchat can still say it has a unique offering, according to App Annie. The app data firm measured user behavior during the fourth quarter and said that on an average day, 35% of Snapchat’s daily users in the U.S. aren’t reachable on Facebook that same day, and 46% can’t be found on Instagram. About 61% of Snapchat’s fans aren’t watching YouTube on a given day, either. Snap said it had 60 million daily active users in the fourth quarter in the U.S. and Canada.
While many people use multiple social media apps to communicate with friends, the finding could help Snap sell ads in a lucrative market that’s increasingly dominated by Facebook and Alphabet Inc.’s Google, which owns YouTube. The company, which will give its first public quarterly earnings report next week, must prove to advertisers that it’s a long-term investment, not just an experimental venue.
Though Snapchat’s features are being copied, the app remains unique in an important way: there are no likes or sharing of content, as on Facebook’s apps. So people tend to use Snapchat for more ephemeral moments, while they use Facebook and Instagram to craft an image of themselves. That’s how advertisers should think about their choice, said Harry Kargman, chief executive officer of Kargo, which manages mobile advertising for media companies.
“Do you want to be in the aspirational environment of Instagram or do you want to be in the real, true peer-to-peer environment of Snapchat?” Mr. Kargman said. “Those are two very different purposes.”
Instagram has doubled its user base, to 700 million monthly actives in two years, fueled by Stories, web signups and better onboarding on low-end Android phones. Instagram’s growth rate is actually speeding up. It took just four months to add the last 100 million users since hitting 600 million in December, while it took six months to go from 500 million to 600 million.
Here’s a breakdown of how long it took Instagram to add each 100 million users:
- October 6, 2010 – Launch
- February 26, 2013 – 100 million; 28 months
- March 25, 2014 – 200 million; 13 months
- December 10, 2014 – 300 million; 9 months
- September 22, 2015 – 400 million; 9 months
- June 21, 2016 – 500 million; 9 months
- December 15, 2016 – 600 million; 6 months
- April 26, 2017 – 700 million; 4 months
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Snapchat wants brands to buy a lot of geofilters that layer fun text and graphics over users’ photos and videos. On Monday, the app opened up its API (application programming interface) a bit more, letting brands buy the location-based promos automatically.
More than 15 of Snapchat’s ad partners in the U.S., U.K., Australia and Canada, including Amobee and Videology, are now pitching sponsored geofilters to agencies and brands, as well as the full-screen, vertical video ads that run alongside stories and Discover content. Until now, advertisers have purchased branded geofilters through Snapchat’s self-service buying tool. The API is Snapchat’s version of programmatic technology that plugs tech companies into the platform to manage campaign spend, data, targeting and creative for advertisers.
In theory, the ad-tech vendors can help brands buy bigger ad packages that include both formats and automatically manage the targeting of geofilters to make sure they run at specific locations and times. Meanwhile, creative firms like VaynerMedia will develop creative templates to help brands design custom messaging for their geofilters.
In recent months, Facebook has relentlessly copied a number of Snapchat’s features, including geo-tagged stickers, and the move to open up more sponsored geofilters could help Snap keep its advantage. According to eMarketer, the app is expected to make nearly $1 billion from advertising this year, up from $404 million in 2016.
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